Casey Introduces Bill to Cut Taxes for the Middle Class and Help Small Businesses Create Jobs

Inaction Would Lead to Huge Tax Hike on Working Families

WASHINGTON, DC – U.S. Senator Bob Casey (D-PA), Chairman of the Joint Economic Committee, today announced legislation to extend and expand the payroll tax cut, putting over $1,500 into the pocket of the average Pennsylvania family next year. 6.7 million Pennsylvanians have benefited from the tax cut. Senator Casey’s legislation would also cut taxes for small businesses, helping them grow and create jobs.

“Preventing a tax increase on working families and helping businesses hire new workers are things everyone should agree on,” said Senator Casey. “Working families hit hard by the recession will have on average $1,000 less in their pockets if the tax cut expires.  Economists have been outspoken on the tremendous positive effects the provisions in this bill will have on the economy and the consequences if Congress fails to act.  Washington can’t turn its back on working families or businesses trying to expand.”

In  addition to cutting the payroll tax from 6.2% to 3.1% for 160 million American workers, the Middle Class Tax Cut Act would:

• Cuts the Payroll Tax in Half for 98% of U.S. Businesses. The Senate bill cuts in half (from 6.2% to 3.1%) the Social Security payroll tax paid by employers on the first $5 million of taxable payroll for 2012. This will benefit 98% of all U.S. businesses.

• Gives an Added Incentive for Businesses to Hire New Workers. The bill completely eliminates (from 6.2% to 0%) the Social Security payroll tax paid by employers on the first $12.5 million of an employer’s increased taxable payroll for the 4th quarter of 2011 and $50 million in increased payroll for 2012.

• Protects Social Security. The bill transfers funds from the General Fund to the Social Security Trust fund to ensure that Social Security is unaffected by this temporary payroll tax relief. 

Leading economists support extending the payroll tax cut to keep the economy moving forward.

Mark Zandi of Moody’s Analytics wrote in an October analysis, “It is critical (and assumed in our baseline outlook) that lawmakers agree at least to extend and increase the payroll tax holiday for workers through 2012 as proposed by President Obama.”

Zandi has estimated that extending the payroll tax cut could create 750,000 jobs.

Senator Casey strongly supported the payroll tax cut for workers that was signed into law in 2010 and is set to expire at the end of this year. He is also a leader in the effort to help small businesses hire workers. Earlier this year, he introduced the Small Business Job Creation Tax Credit Act (S. 1330) to encourage businesses to add jobs and reverse cuts in salaries and worker hours, legislation he first introduced in the previous Congress.

A county-by-county list detailing potential savings from Senator Casey’s legislation is below:

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