In a speech to a joint session of Congress on September 8, 2011, President Obama proposed cuts to both employee and employer payroll taxes for 2012 and tax credits meant to encourage hiring of unemployed workers.
The President’s proposal, the American Jobs Act, would cut employee Social Security payroll taxes in half in 2012. It would also reduce business payroll taxes by the same percentage on companies’ first $5 million in wages and would completely eliminate payroll taxes for companies that increase their payroll by up to $50 million relative to the prior year. The payroll tax provisions would cost $240 billion, according to a White House fact sheet. See Tax Analyst, September 9, 2011, Obama Proposed 1-Year, 50 Percent Cut to Payroll Taxes by Drew Pierson. and Michael Gleeson.
Additional details of the plan are expected on September 19, 2011 when it is anticipated that President Obama will submit a proposal to the Joint Select Committee on Deficit Reduction.