The nonpartisan Congressional Budget Office estimated earlier this year that eliminating payroll taxes was roughly two to four times more effective in spurring economic activity than a reduction in income taxes, the policy option that’s getting most of the attention in Congress.
“This is a better tax cut than a general income tax cut,” said Roberton Williams, senior fellow with the Tax Policy Center. He said getting more money to workers who earn less increases the chance that it will be spent rather than saved, a concept popular among Democrats
Payroll tax holiday: A good idea that scares both parties – Oct. 1, 2010