On Sunday, Senate Minority Whip Jon Kyl (R-Ariz.), a day after saying taxes shouldn’t go up, said he’d like to see all American workers face a tax hike in 2012. Asked specifically about whether he’s support an extension of the payroll tax cut for another year, the far-right Arizonan said Republicans “don’t think that is a good way” to help the economy.
Now, I’m pretty skeptical about whether Republicans are sincere about improving the economy, but if Kyl is willing to take efficacy, evidence, facts, and reason seriously, I have some news he’ll want to consider.
Senate Democrats flagged this clip of Barclays’ Michael Pond, a leading analyst at one of the financial industry’s top firms, reflecting yesterday on what we can expect from the U.S. economy if Congress balks at a payroll cut extension, effectively raising taxes on every American in the workforce.
For those who can’t watch clips online, Pond believes first quarter GDP growth in 2012 will drop from 2.5% to 1%, adding that the payroll break is “worth around $250 billion to the economy.”
Greg Sargent’s reaction was spot on: “What if a top analyst at a major financial firm predicted that failure to pass the payroll tax cut extension would lead to a big drop in that firm’s growth forecast? Would that impact the debate at all?”
It certainly should, right?
In fairness, I should note that Pond is a leading analyst, but other experts are making other projections. Macroeconomic Advisers, for example, believes the end of the payroll tax break would cut .5% from the GDP and cost the economy 400,000 jobs. That’s awful, but Pond believes the effects would be even worse.
The point, though, is that there’s an economic consensus that allowing this tax cut to expire would be a very bad idea, delivering a serious blow to the economy at a terrible time.
The questions for Republicans are pretty straightforward: (1) Why would the GOP support raising workers’ taxes right now? and (2) Given a choice between helping the economy and sabotaging it, which do Republicans prefer?