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The American Jobs Act: Personal Income and Tax Cuts

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Today the Bureau of Economic Analysis released personal income and outlays for September 2011. Personal income increased $17.3 billion, or 0.1 percent, and disposable personal income increased $12.9 billion, or 0.1 percent. That number is helped by the tax cuts in the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 that cut social security withholding by 2 percentage points and that resulted in about $1000 per family per year in increased income.

Knowing that increasing personal income is vital to improving our economy, the President has proposed increasing this tax cut in his American Jobs Act. Under his proposal, the payroll tax cut would be extended to firms by cutting in half their payroll tax on the first $5 million in payroll. Next year, instead of paying 6.2 percent on their payroll expenses, firms would pay only 3.1 percent. The President’s plan would provide tax cuts for all firms, with focused relief on the 98% with less than $5 million in payroll.

For example, a construction firm with 50 workers earning an average of $50,000 a year – for a total payroll of $2.5 million – would receive a payroll tax cut of 3.1% of its total payroll, or about $80,000. The firm’s workers would receive an average tax cut of about $1,500 a year from the employee side payroll tax cut in the President’s plan.

Learn more about the President’s proposed American Jobs Act on the White House website.

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The American Jobs Act: Personal Income and Tax Cuts

Oh that's great news (both of them), tax cutter that means we can keep more income of ours with us... It might to look ridiculous, but think in other sense, our more income has effected in increase of personal income, so end of the day the country is getting the advantage; might be in other sense.....
So enjoy........

Graham

Pay now or pay later

The government takes less tax up front but come April 15 you will still be taxed at the same rate. Thus having less taken out of your check each pay day get ready to write a check to the IRS. Sounds like more smoke and mirrors.

Cut is to the payroll tax. It will not affect income taxes

The tax cut put forth by the President would be for cuts to the payroll tax. This would be seen immediately by consumers.

To ensure that the American Jobs Act is fully paid for, the President has called on the Joint Congressional Committee to achieve additional deficit reduction necessary to pay for the Act and still meet its deficit target. The President will, in the coming days, release a detailed plan that will show how the Committee can achieve the additional deficit reduction necessary to meet the President’s goal of stabilizing our debt as a share of the economy and pay for his plan to put Americans back to work.