The National Federation of Independent Business (NFIB) says that eliminating payroll taxes for a year would give small businesses the boost they need and help workers as well.
Cutting the payroll tax puts more cash directly in consumers’ hands, in relatively small amounts that are likely to be spent rather than saved, the NFIB noted in a statement issued prior to the White House forum on job creation.
Given that the single greatest economic problem small business faces is the lack of customers, the additional spending would be an obvious way to improve sales and balance sheets, the group stated.
Moreover, eliminating payroll tax even temporarily reduces the cost of employees to business, saving existing jobs as well as creating new ones.
“Small business owners and managers do not hire because a national goal is to increase employment, said NFIB chief economist Bill Dunkelberg.
“They hire, when in their judgments, the person hired will generate enough additional revenues to cover the cost of the hire.”
Former Wall Street trader Bruce Krasting — who estimates 2010 payroll taxes at $680 billion — wholeheartedly agrees.
"If the tax were suspended for a year a portion of this pile of money would go directly into the pockets of America's 90 million+ workers,” Krasting writes in his Weblog. “It would equally go into their employer's coffers. The primary beneficiaries would be small businesses."
"In other words, this would go right to where it is most needed."
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