Trump on Payroll Tax Cut: I’ll do it Myself
President Trump threatened to suspend the payroll tax himself after lawmakers refused to incorporate the idea into the next COVID-19 relief package.
“I have the right to suspend it, and I may do it myself – I have the absolute right to suspend the payroll,” Trump told Fox News. “That’s an incentive to people – small businesses and businesses generally to hire back their workers.”
Trump added that he “would consider not signing” a relief package that doesn’t include the tax cut.
Trump’s decision to implement the tax cut without Congress would be a major victory for his reelection campaign and for working class Americans. According to author Stephen Moore, the tax holiday would produce an immediate 7.5% pay increase for every working American, putting more money into their pockets and reducing government spending.
Moore, a proud member of President Trump’s economic recovery task force, has urged the president to declare a national emergency, order the IRS to stop collecting the payroll tax, and instruct the Treasury to stop withholding payroll taxes. In response to Republicans’ concerns that the tax cut would harm Social Security and Medicare, Moore suggests the Treasury put bonds into those agencies.
Furthermore, Trump could promise to sign a future bill that forgives Americans of any tax debt incurred during the pandemic – a move that would make the 2020 election a “referendum on middle-class taxes.”
Lawmakers are rushing to complete another economic recovery package before a monthlong recess beginning this Friday. Aides reported little progress Tuesday, though Sen. Mitch McConnell (R-KY) did express a willingness to support Democrats’ efforts to extend the current $600-per-week unemployment benefit.
“The American people, in the end, need help, and wherever this thing settles between the president of the United States and his team that has to sign it into law and the Democrat not-insignificant majority in the Senate and majority in the House is something I am prepared to support, even if I have some problems with certain parts of it,” said McConnell.
Most Republican lawmakers support a $200-per-week proposal based on concerns that increased benefits would incentivize Americans to remain unemployed.
Weekly unemployment claims have remained above 1 million since mid-March. Unemployment reached a record high in April, with roughly 14.7% of the population recorded as “jobless.” Numbers have improved somewhat since then as states start to reopen restaurants and other businesses.