The centerpiece of the job creation package that President Barack Obama plans to announce Thursday â payroll tax relief for workers and probably their employers â is neither his first policy choice nor that of many economists. But it is the one that they figure has the best chance of getting Republicans' support.
Obama has signaled that he will propose to extend for another year a reduction of 2 percentage points in the 6.2 percent Social Security payroll tax that employees pay, which means about $1,000 more for the average household. And he is considering expanding the tax relief to employers.
In his prime-time address to a joint session of Congress, facing Republican lawmakers and many television viewers skeptical of Washington's ability to spur the lagging economy, Obama is expected to call for a package totaling several hundreds of billions of dollars that would also extend other business tax cuts, put federal dollars into building and repairing roads, rails, airports, schools and other infrastructure programs and provide aid to states to avert more layoffs of teachers.
But the single biggest stimulus measure he will propose is likely to be temporary payroll tax relief. If the current tax cut, due to expire at the end of the year, is expanded next year to employers as well as employees, it would pump roughly $200 billion into the economy, with the aim of stimulating much-needed demand for goods and services from consumers and businesses and, additionally, of giving companies an incentive to hire additional employees.
For the White House, its appeal is that it may be the only large stimulus measure that can pass Congress this year given Republicans' preference for tax cuts.
Read more: http://www.stltoday.com/news/nation...bbe-5858-a942-2aa02653e600.html#ixzz1XF8wr0FT
Obama has signaled that he will propose to extend for another year a reduction of 2 percentage points in the 6.2 percent Social Security payroll tax that employees pay, which means about $1,000 more for the average household. And he is considering expanding the tax relief to employers.
In his prime-time address to a joint session of Congress, facing Republican lawmakers and many television viewers skeptical of Washington's ability to spur the lagging economy, Obama is expected to call for a package totaling several hundreds of billions of dollars that would also extend other business tax cuts, put federal dollars into building and repairing roads, rails, airports, schools and other infrastructure programs and provide aid to states to avert more layoffs of teachers.
But the single biggest stimulus measure he will propose is likely to be temporary payroll tax relief. If the current tax cut, due to expire at the end of the year, is expanded next year to employers as well as employees, it would pump roughly $200 billion into the economy, with the aim of stimulating much-needed demand for goods and services from consumers and businesses and, additionally, of giving companies an incentive to hire additional employees.
For the White House, its appeal is that it may be the only large stimulus measure that can pass Congress this year given Republicans' preference for tax cuts.
Read more: http://www.stltoday.com/news/nation...bbe-5858-a942-2aa02653e600.html#ixzz1XF8wr0FT