Risk & Compliance

Trump Administration Pushes for Payroll Tax Cut

The president has opposed pandemic relief that does not include the measure.

The Trump Administration has signaled it will oppose new relief legislation during the COVID-19 pandemic unless an aid bill includes a “payroll tax holiday.”

In early May, President Donald Trump said he would not support a relief bill without such a measure.

“I want to see a payroll tax cut on both sides, a very strong one, because that’s going to really put people to work,” Trump said in a virtual form on Fox News, where he appeared with Treasury Secretary Steven Mnuchin. “And I told Steve just today, we’re not doing anything unless we get a payroll tax cut. That is so important to the success of our country.”

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In an interview with The Washington Post, White House economic adviser Stephen Moore said, “High-ranking White House officials have told me that we will not sign a phase four deal without a payroll tax cut.”

A spokesperson for the White House said the president has “called on Congress to pass this before and he believes it must be part of any phase four package.”

The Committee for a Responsible Federal Budget has estimated a three-month payroll tax holiday would cost $300 billion. The 7.65% tax currently funds Medicare and Social Security.

The tax holiday has been opposed by prominent Congressional leaders, Democrat and Republican.

“I’m not a particular fan of that,” Senate Majority Whip John Thune, Republican for South Dakota, said. “I guess I’m open to being persuaded that it’s something that could be effective, but I think some of the things that we are currently doing are having a bigger impact.” Oregon Democrat Senator Ron Wyden said it would be a “big mistake” to pass the cut.

“What they want to do is hit Social Security like a wrecking ball with a massive tax cut for the country’s biggest corporations,” Wyden said. “We are going to oppose this with everything we have.”