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

Press Release

With the deadline to maintain a tax cut for working Ohioans looming, U.S. Sen. Sherrod Brown (D-OH) outlined legislation he cosponsored which is being debated in the Senate this week that would stop a huge tax hike from hitting middle-class families. Unless Congress acts by the end of December, a two-percent payroll tax break will expire, increasing 98 percent of Americans' taxes.

"At a time when many families and businesses are still struggling, we must extend and expand this important payroll tax cut," Brown said. "Families will have more money to spend on necessities like gas and food, and their mortgages and rent. Businesses will be able to hire additional workers, boosting the economy. This bill gives tax cuts to people who need them -- and will use them. America's middle class can't wait for them any longer."

During a news conference call, Brown urged his colleagues to extend and expand the payroll tax cut, putting $1,430 into the pockets of the average Ohio family next year. Brown released a county-by-county analysis on Ohioans and small businesses that would benefit from the tax cut.

A broad sample of economists agrees that the payroll tax cut will help our economic recovery. Mark Zandi, who served as an economic advisor to John McCain, has said passing this legislation could create 750,000 jobs. He also said that our economy could fall back into a full blown recession if we do not extend this tax credit. Barclays analyst Michael Pond warned that letting the payroll tax cut expire at the end of this month could cause a drop in GDP of up to 1.5 percent.

Specifically, the Middle Class Tax Cut Act of 2011 would:
* Provide a Tax Cut to 160 Million Workers by cutting the Social Security payroll taxes paid by employees and the self-employed on their wages and salary from 6.2 percent to 3.1 percent. Approximately 160 million workers would benefit from this tax cut, with the average Ohio family seeing $1,430 in additional take-home pay.

* Slash the Payroll Tax for 98 percent of U.S. Businesses by cutting the employer-side Social Security payroll taxes from 6.2 percent to 3.1 percent for the first $5 million of payroll. This would benefit all businesses, but 98 percent of businesses would see their portion of the Social Security payroll tax cut in half. More than 200,000 small businesses in Ohio would stand to benefit.

* Provide an Incentive for Businesses to Hire New Workers by eliminating 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.

* Ask Millionaires to Pay Their Fair Share without Adding a Dime to the Deficit to create or save hundreds of thousands of jobs and prevent a tax hike for workers. The Senate bill would impose a 3.25 percent surtax on modified adjusted gross income in excess of $1 million for both single filers and married couples filing jointly beginning December 31, 2012.

* Protects Social Security by requiring that the Social Security Trust Fund be made whole through transfers from the General Fund

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