January 26th, 2012 | 
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Now that Congress appears finally to have reached a compromise on what must be one of the worst pieces of legislation in years — the temporary payroll tax holiday extension — let’s survey the damage. To begin with, what even minimally rational government enacts payroll tax relief for just two months? As a matter of practicality alone, it makes no sense. The National Payroll Reporting Consortium, representing those who process paychecks, said of the two-month extension passed by the Senate just days before the new year: “There is insufficient lead time to accommodate the proposal,” because “many payroll systems are not likely to be able to make such a substantial programming change before January or even February,” thereby “creat(ing) substantial problems, confusion and costs.” The final compromise appears to tweak this a bit to make it less onerous for small business. But what were they thinking in the first place? What business operates two months at a time? The minimal time horizon for business is the quarter — three months. What idiot came up with two? US businesses would have to budget for two-thirds of a one-quarter tax-holiday extension. As if this government has not already heaped enough regulatory impediments and mindless uncertainties upon business. But making economic sense is not the point. The tax-holiday extension — presumably to be negotiated next year into a 12-month extension — is the perfect campaign ploy: an election-year bribe that has the additional …
Alberto Padillia
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