From Bruce Krasting:
It's hard to describe how happy I am to see Walmart facing a slump. I'm delighted to see that the cause of Walmart's problem is the 2% increase in Social Security withholding taxes.
It's not just Walmart that is feeling the pinch from higher payroll taxes. According to today's WSJ, damn near every company that has a retail sales base is getting nicked.
We are witnessing what happens when tax rates go up. There is (new) definitive evidence that raising taxes decreases consumption. That notion is an old one, but I think the reality that is now being proven out in real time has to make a difference in how people think about taxes, government spending, and the real economy.
Who is responsible for the increase in payroll taxes that is causing all the damage? Don't blame the evil Republicans for this one. The liberal wing of the Democratic Party INSISTED that payroll taxes had to go up on January 1. Want to blame someone for the slump in retail? Blame Harry Reid (D-NV).
Why would liberal Democrats want to whack their base with higher taxes? Easy answer. Because they love Social Security more than anything else.
They would sacrifice anything, including the economy and their political base, to protect SS from the criticism that it was no longer "off budget and self financed."
What an idiotic position. And now those who fought to get the full 12.4% tax reinstated are going to have to pay the price. The evidence is overwhelming; higher payroll taxes hurt the economy.
I’ve felt alone the past four years while writing articles on a weekly basis, trying desperately to make the point that SS is at the heart of America’s economic problems. I have been vindicated.
The ranks of those who will point fingers at SS is going to swell. Those opposed are now going to include all of the big retailers (and their shareholders). That will be a tremendous boost for those who are crying for substantial changes in America's biggest entitlement program...
More on taxes: