
Who wants to pay more taxes? Of course, no one. So the two-month extension to the employer payroll tax is welcomed news to the ears of employees. Especially middle class workers. The bigger question is whether or not the payroll tax break will actually help or induce employers to add new jobs? While the tax break is a good thing, on its face, especially during the holiday period, the fact of the matter is that no significant job increase will come about because of the temporary extension [two months] of the employer paid payroll tax. It makes for good politics and it is definitely welcomed but -- no new jobs.
Let's face it, during the holiday season, employers do a lot of seasonal hiring anyway to beef up for the holiday season spending which spans Thanksgiving, Christmas and the start of the New Year. Get it? Employers beef up head count because of "demand." A demand for products and services brought on by the social pressures to spend all one has [and then some] on holiday gifts for which it takes most of the following year [for most people] to pay off. Bottom line -- demand equals jobs.
A payroll tax break is only a feel good. Instead of spending a lot of political capital on a payroll tax break, maybe we should try to figure out how to create a climate of product and service demand. You think? Some say government has no role in that matter. That might be a bit of a stretch, since the government has been a part of every major economic boom since modern day economics. Granted, the role of government has not been at the same height as that of the private sector. Then again, in this case the private sector is more so in a wait and see mode. Someone has to do something to keep the tribal members happy. Since, the private sector isn't doing much; the baton has been passed to the Feds.
So while the Feds are doing what little they can [to boost the economy] such as the payroll tax extension, the jury is out on the temporary tax cut extension actually creating jobs. One thing is for sure, current employees, across the country, are certainly glad to have more cash in the wallet during the holiday season.