With low-income workers so squeezed in the new economy that affording the bus in the morning is proving a challenge, proposals abound for just how to make life a little bit easier for people the bottom tax bracket.
At the top of the list is the Schock-Minnick Bill, a bipartisan House proposal that would mandate a six-month payroll tax reprieve that could affect more than 60 million workers with gross incomes under $40,000.
A tax break from FICA obligations--the primary vehicle for channeling funds to Social Security and Medicare--would grant low-income workers more money at the end of the month and let small businesses allocate more capital to day-to-day expenses. With seven out of 10 American workers employed by small businesses the benefits could be far-reaching.
Still tax cut proponents see more direct ways to stimulate the economy, namely by reforming the marginal rate policy and reducing corporate tax obligations. Director of Tax Policy at Americans for Tax Reform Ryan Ellis had measured enthusiasm for a payroll tax holiday saying today in a telephone conversation that "all tax cuts are good but some are better than others."
The payroll tax holiday stands uniquely as one tax cut with strong bipartisan support. Republicans approve of the money saved and Democrats like that fact that low wage earners will be most affected.