Payroll Tax Holiday

NFIB strongly supports H.R. 1836, the Small Business RELIEF Act introduced by Reps. Walter Minnick (D-ID) and Aaron Schock (R-IL) on April 1, 2009.  Lost sales is the biggest problem affecting small businesses and this bill remedies the problem by allowing small businesses to keep more of their money to get through the current economic climate.  This bill would eliminate the payroll tax for small businesses for six-months providing a double benefit to the economy by helping struggling businesses reduce costs and providing working Americans with extra money to spend where they see fit.  A payroll tax holiday directly benefits lower- and middle-income taxpayers by increasing their paycheck by the amount they would owe towards the OASDI portion of the payroll tax – currently 6.2% per paycheck.

The payroll tax holiday also supports employment directly by reducing the cost of labor through the elimination of the 6.2% portion of the payroll tax on employers. The payroll tax is in many cases the most burdensome tax a small business pays, since no matter how poorly their business is performing, they must make regular payroll tax deposits. Eliminating the payroll tax can reduce unemployment and keep people working during a period of slowed economic growth. A reduction in the cost of labor has the added benefit of putting money back into the business to cover the cost of labor and other business expenses.

NFIB has been a vocal proponent of a payroll tax holiday on Capitol Hill as it represents the “linchpin” of our economic recovery proposals. Contact Your Representative to tell him or her to support a Payroll Tax Holiday for small businesses.