Bernie Moreno by Gage Skidmore

Sen. Bernie Moreno (R-Ohio) today called for a payroll tax increase that would impose a 56 percent combined tax rate on Ohio small businesses.

Moreno unveiled his self-admitted $3 trillion tax increase in a joint op-ed with Sen. Elizabeth Warren (D-Mass.) published this morning in the New York Times.

The plan calls for fully eliminating the payroll tax cap, currently at $184,500, raising taxes on millions of taxpayers.

The Moreno-Warren Payroll Tax Increase Would Impose a 56 percent Combined Tax Rate on Small and Midsize Businesses in Ohio.

Individually-owned businesses pay both the employee and employer sides of the payroll tax. Small businesses comprise 99.6 percent of all businesses in Ohio and employ over 2.2 million workers, according to the U.S. Small Business Administration.

Moreno’s plan would subject these businesses to a combined top rate of 56 percent. Below is the math:

  • 37 percent top federal income tax rate
  • 12.4 percent Social Security payroll tax
  • 2.9 percent Medicare payroll tax
  • 0.9 percent additional Medicare payroll tax
  • 2.75 percent Ohio state income tax

= Total combined rate of 55.95 percent for Ohio businesses.

In New York and California, combined tax rates on small and midsize businesses would be increased to 64.1 percent and 66.5 percent, respectively.

Moreno’s Payroll Tax Hike Kills 1.3 Million Jobs, Cripples Economic Growth

Eliminating the payroll tax cap would shrink the U.S. economy by 1.2 percent and lead to 1.3 million fewer full-time equivalent jobs, according to an analysis from the Tax Foundation.

Moreno’s Plan is to the Left of Bernie Sanders’ and Kamala Harris’ Tax Plans

The Moreno-Warren plan would fully eliminate the payroll tax cap, raising taxes on a significantly lower threshold of earnings than even socialist Sen. Bernie Sanders (I-Vt.) would impose.

While Sanders has introduced legislation eliminating the payroll tax cap on earnings above $250,000, Moreno would start applying the payroll tax at $184,500. That’s a threshold of earnings $65,500 lower than Bernie Sanders. Even Joe Biden and Kamala Harris campaigned on the pledge to not raise taxes on anyone earning less than $400,000.

Even Hillary Clinton opposed lifting the payroll tax cap, pointing out that it would raise taxes on “police officers, firefighters and the like.”