Wednesday, June 15, 2011

On page A4 of Today's Wall Street Journal

"Payroll Tax Cut Idea Joins Debt Talks."

The Journal is reporting that President Barack Obama is considering pushing for extending a payroll-tax break for workers and creating a new tax break for employers. The implicit assumption around our fiscal policy assumptions are a bit complicated. We are assuming that the payroll tax passed in December goes away. Unless there is a very big cut in the 2012 budget in which case Obama goes for an extension of the payroll tax break.

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