The payroll tax fight in a nutshell.

Republicans: Unlike every other tax cut we’ve dealt with in this congressional session, the payroll tax holiday must be offset. We demand spending cuts.

Democrats: Fine, we’ll offset it with a temporary increase in taxes for the .01% of the population that makes more than a million dollars a year.

Republicans: No. We demand spending cuts.

Democrats: Wait. Are you saying that given the choice between two policies that lead to the same exact levels of aggregate taxation, you’d choose one that raises taxes on 99.99% of taxpaying Americans?

Republicans: Yes. We demand spending cuts. 

Democrats: But why not offset a temporary stimulus measure with one less likely to reduce aggregate demand? 

Republicans: …. 

Democrats: Oh. ….That’s not what you mean by “offset,” is it? 

Republicans: Took you long enough. We demand any economic benefit of the payroll tax holiday be offset.

I can’t believe that we’re even having this debate.

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