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A new analysis of potential stimulus options from the Congressional Budget Office concludes that cutting employer payroll taxes would provide a bigger boost to GDP and employment than a similar cut in employee payroll taxes.Governor Strickland, there goes your hail mary for Ohio's next budget.
Of all the options measured, an across-the-board cut in employer payroll taxes provides the third biggest employment bang for the buck from 2010-2015. Coming in at No. 2 is an employer payroll-tax cut for firms that expand payroll.
Both of those payroll-tax options trump the employment impact of infrastructure spending or aid to states. This may reflect, in part, CBO’s judgment that aid to states and infrastructure spending wouldn’t ramp up until 2011.