Udall Urges Senate Colleagues to Support Middle-Income Americans, Small Businesses by Expanding Payroll Tax Cuts

Releases County-by-County Report on Potential Effect of Payroll Tax Cut on CO Families

Today, Mark Udall urged his Senate colleagues to expand the payroll tax cuts that were enacted last year, lowering the tax burden on Colorado’s middle-income workers, helping business owners bolster our still-recovering economy and saving the average family around a thousand dollars a year.  To illustrate why this is so important, Udall released a Colorado county-by-county report that outlines how much the median Colorado family will save in 2012 if Congress extends and expands the payroll tax cuts currently scheduled to expire at the end of this year – and how much they would lose if it doesn’t.

“My foremost task is to get Coloradans back to work.  Expanding the payroll tax cuts will not only free up more of Coloradans’ paychecks so that they can afford to support their families and local businesses, but it will also encourage their employers to hire faster and inject dollars back into their communities,” Udall said.  “This is a strong step toward preventing a backslide of the progress we’ve made in our economy.  And leading economists agree that the consequences of letting these cuts expire could seriously hamper that recovery.  I’m urging my colleagues not just to extend the payroll tax cuts, but to make them bigger, so this common-sense policy can continue to help Americans just as they’re getting back on their feet again.”

The Center on Budget and Policy Priorities estimates that 2.5 million Coloradans are currently benefitting from the payroll tax reduction of 4.2 percent of wages, which amounts to about $1.7 billion total.  By further cutting their payroll taxes to 3.1 percent, the bill would allow families to take home an additional $500 or so a year.

With experts such as Barclays analyst Michael Pond warning that letting the payroll tax cut expire could cause a drop in GDP of up to 1.5 percent, Udall believes this vote is critical to giving American workers and employers a shot in the arm for the next year.  Coupled with other job-creation bills such as Udall’s Ski Area Recreational Opportunity Enhancement Act and his bill toexpand credit union lending to start or grow small businesses, the economy could build traction in putting Coloradans back to work.

The bill, which is expected to be voted on in the Senate this week, would:

• Cut in half (from 6.2 percent to 3.1 percent) the Social Security payroll tax paid by employees and the self-employed on their wages and salaries for 2012, giving them more cash to spend on their daily needs.
• Cut in half (from 6.2 percent to 3.1 percent) the Social Security payroll tax paid by employers on the first $5 million of taxable payroll for 2012, giving them more cash to hire workers and expand their businesses.
• Completely eliminate (from 6.2 percent to 0) the Social Security payroll tax paid by employers on the first $50 million of an employer’s increased taxable payroll for the 4th quarter of 2011 and the full year 2012.
• Transfer funds from the General Fund to the Social Security Trust fund to ensure that Social Security is unaffected by this temporary payroll tax relief, protecting Social Security.
• Be offset by imposing a 3.25 percent surtax on income over $1 million beginning in 2013.

Below are the details by county of the savings Coloradans would get if the tax cut is expanded, and what they lose if it is not. View/download this data.

Please contact Tara Trujillo or Jennifer Talhelm at 202-224-4334.