Rep. Massa marks National Small Business Week by fighting for the Payroll Tax Holiday Act of 2009

CORNING, N.Y. - To help mark the beginning of National Small Business Week, Rep. Eric Massa announced his co-sponsorship of the Payroll Tax Holiday Act of 2009, H.R. 1836. If passed, this bipartisan bill would create a payroll tax holiday for small businesses. This immediate tax relief for small businesses would help cut costs while putting more money directly into the pockets of working Americans. In the past decade, small businesses have created 70% of the net new jobs. They have helped lead us out of several past recessions and they deserve the full support of our elected officials in Washington. That is precisely what this bill is all about, that's why it has earned the endorsement of the National Federation of Independent Business (NFIB).

"I'm proud to help mark the beginning of National Small Business Week by announcing my full support of the Payroll Tax Holiday Act," said Congressman Eric Massa. "In the past decade, small businesses have created a net total of 70% of all new jobs, and those of us in Congress owe them our full support. By creating a six month holiday on payroll taxes, we will help strengthen our small businesses while returning an estimated total of $120 per week back into the pockets of 33 million working Americans. Our citizens are looking to Washington for solutions and this is definitely a win-win proposal. I look forward to helping push this bipartisan, tax cutting, job creating bill through Congress."

Payroll Tax Holiday Act Summary:

Small businesses are the engines that create nearly 7 of every 10 new jobs in our economy. The Payroll Tax Holiday Act, creates a six-month payroll tax holiday for employers and employees of small businesses with 50 or fewer workers. According to recent U.S. Census Bureau statistics, there are 4,990,000 firms with 50 or fewer employees. This legislation would put roughly $120 per week directly in the pockets of 33 million hard-working Americans for a period of six months. According to Mark Zandi, Chief Economist for Moody's, the payroll tax holiday provides $1.28 impact for every $1 of a payroll tax cut. This is real economic stimulus and that is why the National Federation of Independent Business (NFIB) supports this bill and has made it a top legislative priority for the 111th Congress.

To further ensure the payroll tax holiday created by this bill stimulates economic growth, this legislation requires the small business owners to reinvest payroll tax savings in their own businesses by hiring new employees or purchasing capital that will allow their business to become more efficient, productive, and profitable. One recent study by professors at Stanford and Rutgers estimated that suspending only 40% of the tax could create between 2 and 4 million jobs. The Payroll Tax Holiday Act suspends 100% of the payroll tax for six months.

In this economic climate, the payroll tax limits the growth of our nation's small businesses and adversely affects the spending power of their employees. Further burdened are minimum-wage workers and those earning up to $100,000 per year who see an even larger percentage of their paycheck going towards paying these taxes. In fact, three-quarters of American households pay more in payroll taxes than income taxes. Additionally, small business owners are stuck paying this tax, regardless of the profitability of their business.

The Payroll Tax Holiday Act Helps Workers

* Suspending the payroll tax benefits individuals who need it the most. Since all workers pay the same tax, the percent taken from a lower-wage worker is a bigger portion of their paycheck.

* Returning money to workers directly in their paychecks is an incentive for workers to spend more and will help to alleviate ordinary costs that a typical household faces.

The Payroll Tax Holiday Act Helps Small Business Owners

* Providing payroll tax relief for the employer reduces the cost of labor, meaning an employer is more likely to keep an employee on the payroll through tough economic times.

* Increasing cash flow to small business owners through the payroll tax holiday will give them the additional revenue they need to meet payroll, pay for employee benefits, cover regular business expenses and invest back in their company through new employees or other forms of capital.

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