Jul 23, 2020 - Economy & Business
Why economists don't like the idea of a payroll tax cut
A proposal to suspend Social Security and Medicare payroll taxes for employees and employers through the end of the year is a "very high priority" in any new stimulus deal, White House chief of staff Mark Meadows said Wednesday.
Yes, but: Economists largely agree it would do little to help the economy.
What they're saying: "The White House’s latest economic policy trial balloon leaves out the most important solutions and floats some policies that are diametrically opposed to what the country needs," Amy Hanauer, executive director of the Institute on Taxation and Economic Policy, said in a recent analysis.
- "The proposal re-ups tax breaks for the wealthy and fails to laser focus on vulnerable families that need the most help."
- "A payroll tax cut does more for those who are paid (and paid more) than for those who’ve lost jobs in this downturn. It would likely send at least two-thirds of benefits to the richest fifth of Americans and about a quarter to the top 1 percent."