Roni Deutch, a leading authority on taxation and author of The Tax Lady’s Guide to Beating the IRS, says that the new policies proposed last night by President Obama do not go far enough and may not be the solution to creating more jobs and revitalizing the economy. During The State of the Union Address, President Obama projected that new tax credits for small business owners would incentivize hiring and revitalize the failing economy:
• Suspending Payroll Taxes for New Hires:
Roni Deutch argues that overall, payroll tax hurts both employees and businesses by reducing profitability for companies and dropping take home pay for the employee.“An elimination of the payroll tax altogether could have a far greater impact on the American economy than the Making Work Pay Credit,” projected Deutch. “Without the payroll tax, every working American would see a 7.5% increase in take home pay, which means more money to stimulate the economy.”