Larry Mishel, the President of the Economic Policy Institute, is an old friend, mentor, and co-author (with illustrious others) of NINE editions of the book State of Working America. You write nine books with someone, you either love each other or kill each other. We both remain alive, so you do the math.
“Jared, my man, if there’s going to be a payroll tax holiday, let’s not do it on the employer side at all. It just gives them cash and they have plenty and are not spending it. Cash for workers is much better, so spend the money on them. And, you should always, imho, mention that the funds will be reimbursed to Soc Sec. or people will be concerned you’re weakening it. The danger is that the conservatives like this policy and hope for a permanent cutback in the payroll tax.”
Excellent point re reimbursement. We had that fight around the much smaller 2% payroll tax holiday earlier this year, and it was essential back then to stress this point. Even more so now what with recent R attacks on social insurance (e.g., Medicare privatization).
My instinct is the same as Larry’s re the bigger-bang-for-the-buck if you do the whole thing on the workers’ side of the paycheck. Again, that’s how the current payroll tax cut is structured.
But CBO finds otherwise (see table 1 here), and it would be good to know why. If only I knew the president of a smart, progressive think tank that consistently provides the correct answers to labor market questions like these…