President Obama gave a speech this morning where he used the straw man of his so-called “jobs bill” to blame Congress for the lackluster economic performance on his watch. I say it’s a straw man because everybody knew he was proposing a bill Congress would never pass.
However, I’d like to illuminate the word choice of our President regarding part of his jobs bill, the payroll tax cut bill.
The way President Obama characterized Congress’s passage of the payroll tax cut was put (roughly) the following way:
“It [the extension of the payroll tax cut law] will put more money in the wallets of working Americans.”
All I remember for sure is the conscious choice of the word “put.” Republicans, too, use this word when talking about tax policy — but they shouldn’t.
Why? The government doesn’t “put” money in your wallet unless it’s giving you something you didn’t earn yourself. If the government elects to tax individuals less, that leaves them more of the money they already earned.
Reducing payroll taxes doesn’t put the money in an imaginary wallet since it was destined to go there to begin with. Government just reduced that tax rate — which I am sure those concerned about the Social Security Trust Fund’s solvency absolutely love.
To be fair, some tax policies do, in theory, “put” the money there. Just not the payroll tax cut. Rebates, like in 2003 and 2008, for example, take money given to the government for taxes and return them to taxpayers. Generally, though, one should assume that the fruits of labor belong to the individual that earned it, not that the government is benevolently giving them access to their earnings.
Politicians who use the word “put” think that it is their money. That, or they think it’s their job to decide how much you are entitled to keep. Here’s the bottom line, if a politician says they’ll “put more money in your wallet/pocket” you should be very skeptical of their tax philosophy or intent.
UPDATE: Here is President Obama’s full quote:
Of course, Congress refused to pass this jobs plan in full. They did act on a few parts of the bill — most significantly the payroll tax cut that’s putting more money in every working person’s paycheck right now.
Note, however, that President Obama is incorrect. A payroll tax cut doesn’t put a wooden nickel more into your paycheck, it merely changes how much the government takes.