Business InsiderBruce Krasting
There is one aspect of the final debt deal from DC that took me by surprise. I was convinced the 2% reduction in payroll taxes would be extended through 2012. On July 12th I wrote about this and got it completely wrong. Not only did I think there would be a one year extension of the existing holiday; I forecast that the subsidy would actually be increased. I was steered in the wrong direction by the Boss himself. On July 11th Obama stated:
I want to be crystal clear. Nobody has talked about increasing taxes now. Nobody has talked about increasing taxes next year. Weâ€™re talking 2013 and the out years.
In the same press conference he added:
(cuts in FICA payroll taxes) would be a component of this overall package.
I donâ€™t think the President said these words without having some sort of understanding with Speaker Boehner. Two weeks ago an economic stimulus was part of the plan. Today there is nothing. I think I understand what may have happened. When push came to shove the FICA holiday got shelved. That had to happen to get a deal done. Why? Because we are so broke we canâ€™t afford the stimulus.
Read more: http://brucekrasting.blogspot.com/2011/08/biggest-middle-class-tax-increase-in.html#ixzz1U9PgXJjH