Comparing a Payroll Tax Holiday to Other Tax Breaks: More Effective than Bush Tax Cuts, Less Effective than Making Work Pay Credit

President Barack Obama’s recent proposal to extend the 2 percent payroll tax holiday, which is currently in effect through 2011, is neither the most effective policy, nor the least effective policy, for boosting the economy. The estimates provided here compare the effectiveness of the payroll tax holiday and other policy options.

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