Payroll Tax Cut vs. Small Business?

Supporting the payroll tax cut should be a no-brainer even for the most ideologically tilted GOP members.  But conservatives are complaining it will hurt small business.  Most politicians, from both parties, consider any legislation that hurts small business to be toxic.  Small business is as American as apple pie and motherhood.  Rightfully so.  Small business creates jobs; small business owners take huge risks and work hard to make their companies successful.

The Center for Budget and Policy Priorities

has an analysis that says most, except a tiny minority of small businesses will benefit not be hurt by President Obama’s proposal:

Some have argued that a Senate bill to extend and expand the payroll tax cut and pay for it through a surtax on incomes over $1 million would hurt small businesses and thus weaken job growth.

This claim overlooks the benefit of the payroll tax cut not only for working families but for small businesses as well.  It also greatly overstates the impact that the millionaire surtax would have on a relatively tiny number of small businesses.

The bill’s payroll tax cut would not only boost workers’ paychecks by hundreds of dollars or more in 2012 but also cut the taxes of every small business.  Employers would receive a tax holiday on fully half of their 2012 Social Security taxes on the first $5 million in payroll.  If employers create jobs, they would pay no Social Security taxes on the first $50 million in increased taxable payroll.

The millionaire surtax, in contrast, wouldn’t take effect until 2013 and would hit only a tiny fraction of small businesses.

With unemployment finally dropping, now is the time to rally around Obama’s job proposals.  Expect partisanship to intensify in relation to the economy picking up.  The Republicans are counting on the bad economy the justify their ‘refusnik’ strategy of the last three years by defeating the President in 2012.

 

 

 

 

Subscribe

Subscribe to our e-mail newsletter to receive updates.

, , ,

Comments are closed.