The Reclaiming Earnings to Lift Individuals, Employers and Families (RELIEF) Act

In the current economic environment, the government should look for ways to instill confidence and boost sales for small businesses. The best way to accomplish that goal is for Congress to pass a six-month payroll tax holiday as part of any economic stimulus package. The RELIEF Act would free up cash for new investments and boost sales by putting more money in the hands of small business owners to invest in their businesses, and by giving employees more of their own money to spend wherever they see fit.

Unlike investments in infrastructure, which take time to trickle through the economy, suspending the payroll tax would have an immediate effect. A hiatus on the 6.2 percent tax for employers would decrease the cost of labor and will help employers keep people working. A payroll tax holiday would also directly help lower- and middle-income taxpayers by increasing their paycheck by 6.2 percent—the portion of Social Security and disability insurance tax paid by workers.

Another important reason to suspend the tax is to improve profitability. The payroll tax is levied on businesses regardless of whether they are making a profit or not. For the many small business owners who are currently struggling to keep their heads above water, this tax holiday could mean the difference between surviving and going under.

Read the letter that was sent to Reps. Walt Minnick and Aaron Schock for their introduction of the payroll tax holiday bill.