Republicans finally found a tax cut they didn’t like in the payroll tax holiday. What’s unusual about the payroll tax, which funds Social Security, is that cutting it almost entirely affects middle- and working- class people. Because the tax only applies to the first roughly $100,000 a person earns someone who makes $200,000 or $300,000 gets the same tax cut as someone making $100,000. Republicans seem to be witholding a tax cut as a bargaining chip, as “Boehner said he is willing to negotiate on extending payroll tax cuts,”
Meanwhile, a payroll tax holiday is one of the few types of tax cuts that do actually stimulate the economy, precisely because they mostly affect working- and middle-class people, who need the money more and thus spend it right away.
http://thinkprogress.org/politics/2011/09/17/321786/house-reject-payroll-tax
