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Will Senator Snowe Vote to Increase the Average Family’s Taxes More Than $900?

Unless Congress Acts, Payroll Tax Cut Worth $914 For Maine Families Is Set To Expire At End Of December

FOR IMMEDIATE RELEASE           CONTACT:    Jeremy Funk, 202.470.5878                          
November 30, 2011                                    Lauren Weiner, 202.470.5870 

*See below for the impact on a county-by-county level*

Washington, DC – With the U.S. Senate set to vote this week on extending the payroll tax cut that impacts 800,000 Maine residents, who would see an average tax increase of $914 if the tax cut isn’t continued, Senator Olympia Snowe and her Republican colleagues need to decide if they’re going to put the middle class ahead of the 375 millionaires in Maine and give families a needed break during this holiday season.

Tom McMahon, Executive Director, Americans United for Change: “With experts saying a raise in payroll taxes could mean a loss of 400,000 jobs, this extension should be a no-brainer. So why is it that Republicans have dug in their heels over tax cuts that could mean an extra $914 for Maine families? How could the weight of millionaires and billionaires outweigh the needs of 160 million Americans who would benefit from this tax cut? Senator Snowe has to ask herself if she’s going to continue to defend the 1% at the expense of the rest of the country and her constituents.”

What economists of all political stripes are saying:

•  Macroeconomic Advisers: Payroll Tax Cuts Could Create More Than 50,000 Jobs A Month. “Preliminary analyses of the White House plan estimate that the tax cuts could create more than 50,000 jobs a month, a significant boost considering that employment climbed by 35,000 jobs, on average, in each of the last three months… Joel Prakken, senior managing director at Macroeconomic Advisers, a forecasting firm, said that the benefits of creating more than half a million jobs next year should not be minimized. ‘It’s going to make the unemployment rate lower than it otherwise would be,’ he said. 

• Ameriprise Financial Economist: Payroll Tax Cut Will Add More Than 1 Million Jobs. "This additional spending capacity in the hands of consumers should continue to foster improvements in aggregate domestic demand. And ultimately, it is demand and demand alone that will lead to more business hiring," said Russell Price, senior economist for Ameriprise Financial Services. “Price estimates the increased payroll tax holiday for workers by itself is likely to add between 750,000 to 1 million jobs, and that the new break on payroll taxes for employers could add an additional 100,000 to 200,000 jobs. He added that gross domestic product, the broadest measure of the nation's economic activity, could get a 1.5 percentage point boost as well.”

• Decision Economics Economist: “Payroll Tax Cuts Are Very Powerful.” "Payroll tax cuts are very powerful," said Allen Sinai, chief economist of Decision Economics. "They provide a boost to direct income and, in turn, spending, which is important to growth."

• Former McCain Adviser Mark Zandi: Payroll Tax Cut are “Much Needed.” Mark Zandi, chief economist at Moody’s Analytics, called the payroll tax cut for employers a "creative" way to help small companies, which have struggled more than larger ones to recover from the Great Recession of 2007-2009.  "Something like this is much needed" for an economy grappling with 9.1 percent unemployment, Zandi said. "The economy is on the edge of recession."

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A county-by-county breakdown of the impact of the payroll tax cut for Maine 

Source: US Census Bureau and internal calculations