In it, but not of it. TPM DC

Sidebar: Blistering Wall Street Journal Op-Ed Gets Payroll Tax Cut Wrong

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They seem to have their payroll tax cuts mixed up. The two percent holiday that's been in effect for the past year, and the extension Congress is fighting about right now, are both to employees' share of the Social Security FICA tax. The theory behind the policy is that by increasing worker take-home pay, the cut provides suffering consumers with additional purchasing power, and thus stimulates demand, which is exactly what this sluggish economy needs.

Earlier in the year, President Obama proposed broadening this tax cut to include the employer share of the Social Security FICA tax. That policy operates on the theory that reducing cost-per-employee will create the incentive for job creation. It's a weaker theory -- a lot of big employers are already sitting on a bunch of cash, but aren't hiring because they don't have enough customers (see above about demand). But this is what the Wall Street Journal's editors seem to think has been going on all year -- and they're completely wrong.