Why Republicans should have stood firmly against any payroll tax cut extension

posted at 2:05 pm on December 22, 2011 by Tina Korbe

While Republicans and Republicans near a deal to extend the payroll tax cut, an extension remains poor policy. The Social Security trust fund was designed as a trust fund, to which we would all contribute. True, plenty of retirees receive far more in benefits than they ever contributed in the first place, but, the point is, Social Security is the one safety net in which we are all invested.

Certainly, Social Security is in desperate need of reform — I’m one who didn’t flinch when Rick Perry called it a Ponzi scheme — but a payroll tax cut is not it. If ever President Obama’s rhetoric about taxes as “investments” was true, it’s in the case of the payroll tax. Even workers among the 47 percent of Americans who pay “no taxes” still contribute to Social Security. Especially given that the cut will likely produce no very great burst of economic activity, the extension can, perhaps, best be interpreted as a redistributive policy.

But this post is actually not intended to be an enumeration of the specific policy reasons to oppose the payroll tax cut extension. It is, rather, a post intended to remind Republicans in the House and Senate of their role as elected representatives. I get it: The payroll tax cut extension is tough to oppose. It’s a middle-class tax cut that is highly favored by the American people. That last fact alone would tempt any representative to support it. After all, aren’t our elected officials supposed to vote in such a way as reflects “the will of the people”?

Yes, but … We are not a direct democracy for a reason. If we were, we would have voted ourselves a payroll tax cut extension about six months ago and avoided all this end-of-the-year drama in the first place. It still would have been poor policy.

Yes, our representatives are to be responsive to our wishes and accountable before us. That’s why we have elections. But, during their term in office, representatives and senators (especially senators!) are called to bring wisdom and perspective to the governing process.

Calvin Coolidge, for example, believed that representatives were duty-bound to follow their consciences once elected.

“We have too much legislating by clamor, by tumult, by pressure,” Coolidge said once while governor of Massachusetts. “Representative government ceases when outside influence of any kind is substituted for the judgment of the representative.”

According to historian Paul Johnson, Coolidge thought voters have the right to vote, but a representative, having been voted into office, must use his judgment. Johnson writes: “Coolidge added: ‘This does not mean that the opinion of constituents is to be ignored. It is to be weighed most carefully, for the representative must represent, but his oath provides that it must be ‘faithfully and agreeably to the rules and regulations of the Constitution and laws.””

But no better argument exists for the idea that, occasionally, representatives will have to cross their constituents so as to serve them than that made by Alexander Hamilton writing as Publius in Federalist No. 71. It’s a long passage, but it’s well worth the effort it takes to read it (emphasis mine):

The republican principle demands that the deliberate sense of the community should govern the conduct of those to whom they intrust the management of their affairs; but it does not require an unqualified complaisance to every sudden breeze of passion, or to every transient impulse which the people may receive from the arts of men, who flatter their prejudices to betray their interests. It is a just observation, that the people commonly intend the public good. This often applies to their very errors. But their good sense would despise the adulator who should pretend that they always reason right about the means of promoting it. They know from experience that they sometimes err; and the wonder is that they so seldom err as they do, beset, as they continually are, by the wiles of parasites and sycophants, by the snares of the ambitious, the avaricious, the desperate, by the artifices of men who possess their confidence more than they deserve it, and those who seek to possess rather than to deserve it. When occasions present themselves, in which the interests of the people are at variance with their inclinations, it is the duty of the persons whom they have appointed to be the guardians of those interests, to withstand the temporary delusion, in order to give them time and opportunity for more cool and sedate reflection. Instances might be cited in which a conduct of this kind has saved the people from very fatal consequences of their own mistakes, and has procured lasting monuments of their gratitude to the men who had courage and magnanimity enough to serve them at the peril of their displeasure.

In this case, the president — with his cross-country stumping in favor of the American Jobs Act — flattered our prejudices to betray our interests. Of course we’re prejudiced in favor of the cut. Who doesn’t want more take-home pay? But at a time when broken entitlement programs are the major driver of our economy-crushing debt, reducing contributions to Social Security — outside of the context of comprehensive reform — betrays our interests.

Meantime, House Republicans initially opposed the payroll tax cut as poor policy. That is, they saw that, in this case, our interests were at variance with our inclinations. But the minute they decided to play politics — to use this as a means to ensure Keystone or, really, just to curry favor with the electorate — they proved that, in this instance at least, they lacked the courage and magnanimity to serve us even at the peril of our displeasure. No monuments going up to these guys anytime soon.

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Unfortunately this issue is not quite as simple as protecting fiscal responsibility by voting down minor tax cuts during a period of unsustainable deficits. The reality is that all congressional moves should be viewed through he prism of adding a supermajority in the Senate and a presidency in an effort to dismantle the damage created by Obabacare and budget excesses. Sometimes you have to break a few eggs to make an omelette.

oconp88 on December 22, 2011 at 7:37 PM

Dems shamelessly demogogue every issue—“the middle class is shrinking, republicans are racists and do not care for the people and are the party of no. They love dirty water and filty air and want to throw your grandmother over a cliff. Republicans are “scrooges” and will deprive you of forty bucks at Christmas!—and yet, it works! The dems have been winning over public opinion since 2010. Republicans on the other hand, Cantor and Ryan in particular, either cannot or will not articulate anything except in terms only an accountant could love. It is long past the time for the Republican Party to put a winning “message” together so we can get rid of this corrupt administration. We need a Conservative Messiah who is intelligent and knowledgeable and charismatic, and articulate, and actually conservative with pure, unblimished family values; but, as I have posted elsewhere, he/she has not appeared; hell, they haven’t even tweeted!

Oracleforhire on December 22, 2011 at 7:55 PM

Immediately after going into effect in 1935, various parts of the Social Security Act were challenged as unconstitutional and reached the Supreme Court for decision in 1937. In Helvering v. Davis (301 US 619), the Court sustained the Act under Congress’ power to impose taxes. In its decision, the Court revealed some of the truths about Social Security.

First, employees are not making contributions into a retirement program, but are, in reality, paying a “special income tax” which is deducted from their wages and paid to the federal government by the employer. This “special income tax” is imposed on the employee for the so-called “privilege” of being employed by an employer.

Second, employers are not making matching contributions into a retirement program for their employees, but are, in reality, paying an excise tax for the privilege of having individuals in their employ.

Third, there is no retirement trust fund. The Court stated:“[t]he proceeds of both taxes are to be paid into the Treasury like internal-revenue taxes generally, and are not earmarked in any way.” (Bold added) Neither tax is set aside to pay Social Security benefits. Both taxes are general fund income taxes, which are used to pay the everyday expenditures of the federal government.

Social Security is simply a tax and social welfare scheme disguised as a retirement program.

Skylolo on December 22, 2011 at 9:30 PM


That’s interesting b/c a lot of people act like there was universal support for Social Security at the time.

Dr. Tesla on December 22, 2011 at 10:12 PM

Have you ever wondered why individuals who have not paid a penny in Social Security taxes can receive various benefits under the program? The answer is simple. Social Security is nothing but a government welfare or assistance program. The Founders would have classified it as a form of “poor relief.” In 1960, in Flemming v. Nestor (363 US 603), the Supreme Court stated:“…eligibility for benefits…[does] not in any true sense depend on contribution through the payment of taxes.” If Social Security were a legitimate retirement/benefit program, only those individuals who contributed to “the program” would be eligible for benefits. But, since Social Security is a tax and social welfare scheme, Congress has total discretion to determine the qualifications for receiving various benefits under the program.

In addition, the federal government is not contractually obligated to pay out promised benefits even though an individual paid into the so-called program all his or her life. The Supreme Court, in the Nestor case, ruled that individuals paying Social Security taxes do not acquire any property or contractual rights, as they would in an insurance or annuity plan. In addition, the Court stated:“[c]ongress included in the original Act, and has since retained, a claim expressly reserving to it…‘[t]he right to alter, amend, or repeal any provision’ of the Act.”

Payroll deductions are not retirement contributions and do not guarantee the receipt of any benefits. They merely qualify the individual for consideration in a federal charity program that can be modified at any time. In fact, if Congress decided to abolish Social Security tomorrow, the American people would not have any legal claim for promised benefits.

Skylolo on December 23, 2011 at 12:03 AM

Meantime, House Republicans initially opposed the payroll tax cut as poor policy. That is, they saw that, in this case, our interests were at variance with our inclinations. But the minute they decided to play politics — to use this as a means to ensure Keystone or, really, just to curry favor with the electorate — they proved that, in this instance at least, they lacked the courage and magnanimity to serve us even at the peril of our displeasure. No monuments going up to these guys anytime soon.

Republicans generally lack the courage to “Serve us even at the peril of our displeasure.” They also as a general rule, lack the courage or common sense to articulate why their philosophy is better than that of the Democrats. In fact, as I see it, Republican’s overarching ideal seems to be: “Go along, to get along.”
I have been a life-long Republican, however, the only reason I remain one is that the other choices are worse.

baron scarpia on December 23, 2011 at 12:17 AM

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