White House Contemplating Payroll Tax Break for Employers
Most of us have been taking 2.0% more of our paycheck home than we did in 2010. That’s because the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 temporarily reduced the employee social security withholding tax rate from 6.2% to 4.2% for one year.
There is now talk that the White House is exploring the option of giving employers the same break on taxes they pay on wages. This has been prompted by the fact that the economic recovery has slowed down. The Labor Department reported that the month of May had the slowest jobs growth in eight months.
The proposal would reduce the employer portion of social security taxes from 6.2% to 4.2%. The White House hopes that employers will use the proposed savings to hire more workers and thus reduce the unemployment rate, which is currently 9.1%.
We at Anders will continue to monitor this development and keep our clients informed on any changes.