A Payroll Tax Break May Improve Employment Slump
By Brianna Panzica
Last month, unemployment was at 9.1%, the highest of the year. And the economy appears to be slowing.
Rising prices have cut down consumer spending, and aching businesses have slowed hiring.
Only 54,000 new jobs became available last month.
And the Obama administration is aware that something must be done to fix this before conditions get even worse.
Discussions have been underway regarding a break from payroll taxes.
Employee payroll taxes have already been cut down in hopes of increasing the lagging consumer spending and improving gross domestic product.
Now, the Republican-dominant House seems to be supportive of giving employer payroll taxes a temporary holiday.
Giving employers a break in payroll taxes, advisors believe, would allow them to use the extra money toward expanding their workforce.
The employer side of payroll taxes goes to disability and the Social Security trust fund.
The government plans to repay Social Security through general revenue if they do follow through with the plan to provide the tax break.
Some opponents wonder if this will pose a threat to the Social Security trust fund despite the government promise to account for that.
But others believe this is necessary to help businesses that are hurting and provide them with a good reason to boost their hiring rate, a step that is necessary to cut down on the growing unemployment rate.+1
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