RELEASE: The Importance of Extending the Payroll Tax Cut and Emergency Unemployment Benefits
Washington D.C. – Today, the Center for American Progress released a package of products illustrating the important impact of the payroll tax cut and emergency unemployment benefits on millions of American households, businesses, and the economy.
This week, Congress will vote on extending and expanding the temporary payroll tax cut for 160 million American workers. Congress is also expected to consider extending emergency unemployment benefits that support those workers and local economies hurt most by the Great Recession. Failure to extend these two critical measures by December 31 will depress U.S. economic output by about 1 percent and raise our risk of slipping back into recession.
In a column entitled "The Importance of Extending the Payroll Tax Cut and Emergency Unemployment Benefits: By the Numbers," the Center for American Progress highlighted several ways in which both policies affect Americans:
Payroll tax cut
The president and Congress cut employee payroll taxes by 2 percent for 2011. Congress is now considering expanding the cut to 3.1 percent for workers and extending it to employers.
- $120 billion: Total increase in workers’ take-home pay thanks to the payroll tax cut in 2011.
- 122 million: The number of U.S. households that have more money to spend in 2011 because of the tax cut.
- $1,426: Average annual benefit per household in 2012 under proposal pending in Congress.
- 1 million+: New jobs that could be created thanks to an extension and expansion of the payroll tax holiday.
- 98: Percentage of businesses that would see their payroll taxes cut in half under the bill pending in Congress.
- $1.25: Amount of economic growth generated by every dollar spent on a payroll tax cut.
Emergency unemployment benefits
A temporary extension of emergency benefits for long-term unemployed workers will expire at the end of the year if Congress fails to act.
- 2.2 million: The number of job-seekers who will lose benefits if Congress fails to extend emergency unemployment insurance.
- 3.2 million: Number of Americans pulled out of poverty in 2010 thanks to unemployment benefits.
- $296: Average weekly benefit paid to unemployed workers in 2012.
- 700,000+: Number of new jobs created thanks to emergency and extended unemployment benefits in recent years.
- 5: Approximate number of workers actively job-hunting for every position available.
- $1.52: Amount of economic growth generated by every dollar spent on unemployment benefits.
A map, also released by the Center for American Progress today, reveals how much the payroll tax cut would increase the take-home income of a typical family in each of the 50 states.
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