Wage-earning Americans of all income levels would gain from the one-year payroll tax cut, from 6.2 percent of income down to 4.2 percent. Like the extension of unemployment benefits, many economists see this move as an effective way to pump more consumer spending into the economy.
Someone making $50,000 a year would have an extra $1,000 to spend, for example. The infusion would total about $120 billion. But some policy experts say this cut should be bigger – wiping out the tax altogether for a year or two.