Many of you may have noticed a slight bump in your paychecks this month. No, it’s not an accident! The payroll tax cut, signed into law under last year’s tax cut compromise, just went into effect for more than 159 million American families. As you may recall, December’s tax package included a 2% cut in the employee portion of the payroll tax.
According to The Hill, “Under the payroll tax holiday, the average worker will see an annual paycheck increase of about $700, and the average family will see an increase of more than $1,000.” Furthermore, “Economists estimate the U.S. is likely to see economic growth of 3 percent to 4 percent in 2011.”
While we had grave concerns surrounding many of the provisions in the “compromise,” we were very pleased to see the payroll tax cut included. It’s a pro-growth measure that is much needed as our nation continues to face high unemployment and a dismal economic climate.
Enjoy! For the next 12 months anyway.
And in case you missed it, go here for a closer look at additional provisions within the tax deal.