Payroll Tax Cut Adds $700 Million to Nebraska Worker's Pockets

Tuesday, January 18, 2011 BySenator Ben Nelson It’s a new year and while our economy isn’t out of the woods yet, we’re seeing more daylight than we have and a lot more than two years ago at this time when every month about 500,000 Americans were losing their jobs. Part of why we’re getting back on the right track are major tax cuts Congress passed that enabled Nebraskans to keep more of their own money. They’ve spent it in thousands of ways locally, and so have people in every state, that have helped the economy nationally. Tax Cuts in Recovery Act Saved Nebraskans More than $346 million You may not realize that Congress passed those tax cuts because they were part of the Recovery Act enacted in early 2009 and got lost in all the usual political noisemaking in Washington. The Recovery Act’s Making Work Pay tax credit kept $9 million each week in the hands of Nebraskans. That tax credit went to more than 600,000 workers and working families, saving them $346 million in 2009 and millions more in 2010. That’s money Nebraskans spent on things like food and clothing and appliances, but also on business investment, boosting jobs and economic growth. Have You Heard of the New Tax Cuts? The Making Work Pay tax credit expired at the end of last year. Just in time, Congress approved a new major tax cut that will help every worker this year and next. Again, you might not have heard much about this new tax cut. It was tucked into the big bipartisan tax bill that got a lot of attention over whether to extend all of the tax cuts passed in 2001 and 2003 that were expiring at the end of the year. I’m glad we came together to make sure that taxes don’t go up while we are still digging out of the recession. After the first of this year the new tax cut kicked and it is reducing the payroll tax by 2 percent for every worker in Nebraska and across our country. That means bigger paychecks, which people will put to good use stimulating our economy. The payroll tax cut goes to 159 million working Americans. The typical worker will see an average of $695 more in their paychecks this year. 1 Million Nebraskans Will See an Average of $713 More Nebraskans will make out a bit better. One million Nebraska workers are receiving aq 2 percent cut in their payroll taxes. As a result, the typical Nebraska worker will see $713 more this year and in 2012, according to the White House. Keeping $700 million each year in the hands of Nebraskans sounds like a good way to deliver the tools private citizens need to help turn our economy around. It’s certainly preferable to government spending the money. Nebraskans will use their payroll tax cut money to pay bills, buy goods, invest in new equipment and that will help with jobs, economic development and just keeping families afloat financially. People may not have heard enough about this new tax cut, but they’ll certainly feel it and our economy will be the better for it.