The National Federation of Independent Business, a small business advocacy group based here, is calling on Congress to pass a six-month payroll tax holiday as part of any economic stimulus package that would be considered in the upcoming weeks.
NFIB’s November Small Business Economic Trends survey showed that small business owners are feeling the impact of the current economic recession. Only 4 percent of small business owners surveyed, plan to create new jobs, and 50 percent reported profits falling. The percent of all owners reporting higher sales in the past three months (seasonally adjusted) fell to a net-negative 25 percent, the worst reading in the 35-year survey history of the survey.
Eliminating the payroll tax would have an immediate effect on employment the NFB said. The suspension of the 6.2 percent payroll tax on employers will decrease the cost of labor and will help employers keep people working during this period of slowed economic growth.
A payroll tax holiday will also directly help lower-and-middle income taxpayers by increasing their paycheck by 6.2 percent — the current OASDI (Social Security and disability insurance) portion paid by workers.
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