February 01, 2010 08:43 PM UTC

Senator Charles Schumer (D-NY): New tax cuts for the wealthy and big businesses

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• by: CoalCreekWildfire

Senator Charles Schumer (D-NY) is proposing a tax cut that benefits big businesses and high-wage employees. He proposes a Payroll Tax Holiday for “any private-sector employer” that is not “biased toward either low-wage or high-wage workers.” (1)

“Any private-sector employer that hires a worker who had been unemployed for at least 60 days will not have to pay its 6.2 percent Social Security payroll tax on that employee for the duration of 2010.”

“This proposal is not biased toward either low-wage or high-wage workers… a business saves 6.2 percent on both a $40,000 worker and a $90,000 worker.”

Why level the playing field with equal rules for the big and small, rich and poor?

“… the jobs credit that existed in the late 1970s was of limited success, and it was excruciatingly complicated. Recalling this experience, members of Congress from both parties have been lukewarm to such a credit, and the idea was dropped from the stimulus package last year.” (1)

Simple rules are easier to implement, less risky, and more likely to be adopted by small businesses quickly. They are also cheaper:

“[If] three million unemployed workers were to be hired… the gross cost of the Social Security tax cut and the additional credit would be only $7.6 billion.

And that’s before we consider the offsets from income and payroll taxes paid by these workers.”

That’s $2,500 per job.

Compare that to $1,313,620 per job for the Stimulus Program. (2)

“Recipients of economic-stimulus money said 599,108 workers were being paid by the funds in the last quarter of 2009…

The recipients’ reports, published on the official government Web site recovery.gov late Saturday, are likely to fuel further controversy over the impact of the $787 billion package…”

1) Charles E. Schumer (D-NY) and Orrin G. Hatch (R-UT), A Payroll Tax Break for Jobs, New York Times Opinion Section, 1/26/2010 (viewed 1/31/2010 18:12 MT) http://www.nytimes.com/2010/01…

2) Louise Radnofsky and Corey Boles, Latest Stimulus Report Fuels Jobs Pressure, WSJ, 2/1/2010 7:55 AM (viewed 2/1/2010 10:31 AM MT) http://on.wsj.com/cTkbp4