nailing the economy and all workers

From the editorialists of the WSJ, a focus on the new payroll taxes and top marginal income tax rates proposed by the Democrats...

Say this about the 1,018-page health-care bill that House Democrats unveiled this week and that President Obama heartily endorsed: It finally reveals at least some of the price of the reckless ambitions of our current government....

Mr. Obama's February budget provided the outline, but the House bill now fills in the details. To wit, tax increases that would take U.S. rates higher even than most of Europe. Yet even those increases aren't nearly enough to finance the $1 trillion in new spending, which itself is surely a low-ball estimate....

A new payroll tax. Unemployment is at 9.5% and rising, but Democrats will nonetheless impose a new eight percentage point payroll tax on employers who don't provide health insurance for employees. This is on top of the current 15% payroll tax, and in addition to a new 2.5-percentage point tax on individuals who don't buy health insurance. This means that any employer with more than $400,000 in payroll would have to pay at least 25% above the salary to hire someone. Result: Many fewer new jobs, with a higher structural jobless rate, much as Europe has experienced as its welfare states have expanded.

Given the inelasticity of labor supply, an additional 8% payroll tax will result in 8% lower wages. Nice trade-off, huh?

This is the saddest part of all: extending such a painful tax (far more painful for most people than the so-called income tax). Instead of extending it, any true friend of the working poor and middle class would be looking to reduce or eliminate it. Sadly, Democrats don't qualify.