Today, U.S. Senator Bob Casey announced the introduction of the Middle Class & Small Business Tax Cut Act of 2012. This legislation is an extension of the 2% payroll tax cut for all of 2013 and includes of a Small Business Tax Credit that would be available to companies that increases payroll or hires additional workers.
"These are common-sense measures with proven economic benefit," said Senator Casey "Helping small businesses expand and providing working families with a little more money in their pockets will create jobs and keep the economy growing. Protecting the middle class and fueling the economy is something both Republicans and Democrats should support."
The Middle Class & Small Business Tax Cut Act would:
Continues the Payroll Tax Cut for 160 million American Workers. The Senate bill continues the 2% cut in the payroll tax for all of 2013
Gives an Added Incentive for Businesses to Hire New Workers. The bill provides a 10% tax credit for any small business on the amount their payroll increases due to hiring additional workers or increasing pay.
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.
The payroll tax credit has proven economic benefit. According to the Congressional Budget Office, a tax credit based on an increase in payroll would have the greatest positive impact on America's GDP when compared to other job creation policies. The Joint Economic Committee released a report this week, which stated that extending the tax cut again while the economy continues to recover makes great sense both because middle class families count on it and because it will help drive consumer spending to keep the economy growing.
Senator Casey led the fight last year for this tax break which gave working families across Pennsylvania an extra thousand dollars on average last year, and he was a strong supporter of the payroll tax cut for workers that was signed into law in 2010. He is also a leader in the effort to help small businesses hire workers, introducing the Small Business Job Creation Tax Credit Act (S. 1330) in 2010 and 2009 to encourage businesses to add jobs and reverse cuts in salaries and worker hours.