“I am in favor of cutting taxes under any circumstances and for any excuse, for any reason, whenever it’s possible,” the late Milton Friedman, a Nobel laureate in economics, advised in 2003. Mr. Friedman explained that, with government spending at close to 40 percent of national income in the United States, cutting taxes was the only way to restrain spending. We agree.
He was talking about a type of tax cut that’s back in the news. President Barack Obama has proposed extending this year’s payroll (Social Security) tax cut for another year. The tax was lowered from to 4.2 percent of employee income from 6.2 percent. (The portion of the tax paid by the employer remained at 6.2 percent.) The House of Representatives passed the tax cut Tuesday.
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