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The Atlantic: How to Pay For the Payroll Tax Cut

Author: Marc Goldwein
December 12, 2011

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Marc Goldwein suggests phasing in a policy called "chained CPI", a more realistic measure of inflation he believes would save well over $200 billion in the next decade.

It's become a Christmas tradition for Congress to end the year by extending all the policies which expire at year's end. There is the Alternative Minimum Tax, which has to be "patched" every year so that it reaches only four million taxpayers instead of thirty million. There is the looming 27% cut in Medicare payments to doctors which policymakers will need to protect with a "Doc Fix." And on top of that, this year, we're dealing with the expiration of a payroll tax holiday and extended unemployment benefits meant to help boost a weak economy.

Extending these provisions every year is really expensive. It comes out to about $275 billion for a single year. That's more than a quarter-trillion dollars added to nation's credit card.

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