The payroll tax holiday that passed Congress in the winter of 2010 … was good short-term politics for both Democrats and Republicans: it was a tax cut that liberals hoped would double as stimulus, and a boost to the middle class that conservatives could support without embracing new federal spending. But more important, it opened the door to what would be good long-term policy as well—because more than almost any feature of the American tax code, the payroll tax deserves to be pared away into extinction.

Thus sayeth Ross Douthat, conservative prelate of the High Church of News.

Amen.

Furthermore, decrees Douthat,> Whatever its past political advantages, the payroll tax now imposes an unnecessary burden on a stagnating economy. In an era of mass unemployment, mediocre wage growth and weak mobility from the bottom of the income ladder, it makes no sense to finance our retirement system with a tax that falls directly on wages and hiring and imposes particular burdens on small business and the working class.

Amen again. But let’s go further.

Douthat might not agree (though he might, being a bit of a heretic), but the elimination of the payroll tax would be a perfect complement to a sharp rise in upper-income marginal tax rates.

As we all know, the official Republican term for the rich is “job creators.” The official Republican formula for creating jobs, therefore, is to hand the rich an ever-larger share of the nation’s disposable income.

Trouble is, the rich can do any number of things with the extra money. They can save it. They can speculate with it in the stock market. They can use it to book a larger suite at the Cipriani for a Venice weekend. And yes, some of them might spend or invest some of it in a way that creates a job for someone. But there is no guarantee that that someone will be American, as opposed to, say, Chinese.

However, if the extra cash goes to regular people, a little at a time in each paycheck, they are highly likely to spend it—spend it right away and right here, in the United States.

When it comes to tax cuts, especially in a period of high unemployment, flagging demand, and big corporate profits, when investors are sitting on piles of cash, payroll tax cuts are much, much more stimulative than high-end income tax cuts. The only thing more stimulative, of course, is “new federal spending”—because when the government spends money the money gets spent.

Even so, cutting (or eliminating) the payroll tax is a remarkably good idea. By the same token, the payroll tax itself is a remarkably bad idea, and not just because it’s regressive. The payroll tax is a bad idea because it’s a tax on jobs—and jobs are something we want more of, not less of. It’s not a tax on “job creators” who may or may not get around to creating a job sometime. It’s a tax on job creation itself. It makes about as much sense as a special surtax on charitable contributions. Or a tax on small sugary drinks.

There’s a problem, though, especially for Democrats. The payroll tax—a.k.a. the Social Security tax, a.k.a. the Federal Insurance Contributions Act (FICA) tax—is linked to the “trust fund” that independently finances Social Security and Medicare, or pretends to. Whether the trust fund is truly a trust fund or just a political fiction—a “disguise,” Douthat calls it, a ploy to “keep Social Security sacrosanct” by making people think it’s “a pay-as-you-go system” when actually it “redistributes from rich to poor and young to old”—is a little beside the point, the point being that many Democrats (and not a few Republicans) believe that the linkage is crucial to maintaining public support for social insurance. That belief may or may not be warranted. The principle of guaranteeing the elderly a minimally decent income and minimally decent health care is now so firmly established that the linkage to a particular tax may no longer be necessary. But why take the chance?

In this week’s “Comment” for the magazine, Elizabeth Kolbert makes a powerful case for a carbon tax. Which prompts a thought.

By all means let’s have a stiff carbon tax—a whole carbon-tax package, one that folds in levies on other pollutants and on the wasteful or dangerous use of natural resources in general. And, at the same time, let’s make the carbon tax the source of the trust fund. Call it the Dignity for Seniors tax, because that’s what it would provide. Or the National Patrimony tax, because that’s what it would preserve. Or the Social and National Security tax, because it would underwrite both kinds.

Or, maybe, the More Payrolls Tax. As John Marshall and Daniel Webster long ago pointed out, the power to tax involves the power to destroy. With the More Payrolls Tax, we would no longer be using that power to destroy jobs. We’d be using it to create them—and, at the same time, to destroy (well, mitigate) global warming. We’d be nudging investment decisions in a socially and environmentally responsible direction by making it relatively cheaper to use human energy and relatively dearer to use the fossil-fuel kind. We’d be putting a particular dent in youth unemployment, because the payroll tax is a bigger percentage drag on low-wage entry-level jobs than on high-salaried ones.

Admittedly, a few prophets have been preaching this gospel for years and getting a pretty good response—but largely from the choir. Maybe it’s time to hit the streets and evangelize.

Illustration by Marc Rosenthal.