Senate Democrats now want to “pay for” their proposed cut in the payroll tax with, among other things, higher fees from mortgage lenders to Fannie and Freddie.
Seriously? The Democrats must understand-they have to-that higher fees to the GSEs are just a stealth tax hike, and one, in this case, aimed at a sector of the economy that can least afford to pay it. Those fees will simply be passed along to borrowers by the banks in the form of higher interest rates or closing costs. In the end, the fees will be paid by individuals, just like every other tax is. Even worse, the new tax would hit the middle class especially hard-the same middle class that the Democrats keep insisting they’re the champions of. Insane.
And don’t argue, by the way, that this new GSE fee wouldn’t really be a tax, strictly speaking, since if people don’t want to pay it, they don’t have to buy a house or refinance their mortgage. Are you kidding me? If the economic recovery is ever going to gather steam, it will be because people start buying houses and so help revive the housing market, and refinance their mortgages so that they have more money to spend. And the Democrats want to make that harder to do?
If the Democrats in the Senate want to cut the payroll tax, they should offset the lost revenue the way private businesses do every day when they’re faced with a shortfall: they should cut spending elsewhere.
What do you think? Let me know!