President Donald Trump’s proposal for a payroll-tax cut to juice the economy amid the threat from the coronavirus is running into pushback from Democratic lawmakers.

Ron Wyden, the senior Democrat on the Senate Finance Committee, said the proposal Trump floated to Republican lawmakers on Tuesday would be a “huge mistake.”

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

Senator Sherrod Brown of Ohio

Sen. Sherrod Brown, the senior Democrat on the Banking Committee, said he supported “helping those people that are getting hurt. It doesn’t mean more interest rate cuts, it doesn’t mean more tax cuts that favor the wealthy, which Trump always does.”

Trump told Republicans that he wants the payroll tax rate to drop from 14.2% to zero through the end of the year in the hope that the extra money in workers’ paychecks will spur consumer spending, a bedrock of economic growth. “Under the president’s timeline, he would ensure that the tax is zeroed out throughout his re-election campaign,” NBC News noted.

The tax generated $1.17 trillion, or 35.2% of all federal revenues, in fiscal 2018, with most of the revenue going to fund Social Security, Medicare, and other social insurance benefits.

But economists say that slashing the tax now would do almost nothing to help low-income Americans.

“A one-year payroll tax cut of 2% of income would provide up to a $5,508 tax cut to a high-income couple, only $500 to a single parent getting by on $25,000 a year, and nothing for a worker placed on leave without pay,” Jason Furman, a top economist in the Obama administration, wrote on Twitter.

House Democrats said they plan to pass a stimulus bill as soon as Thursday that includes enhanced unemployment benefits, paid sick leave, and a boost in the availability of food stamps. Majority Leader Steny Hoyer, Maryland Democrat, said a big payroll tax cut was a “non-starter.”

, , , , ,

2 responses to “Democrats Balk at Trump Payroll Tax Proposal”

  1. Instead of being so negative why not consider shifting all or a portion of the SS tax from the employee to the employer–Let’s say we move 3% of the employee tax and increase the employer tax to 10%. This would increase the employer tax, decrease the employee tax and keep the SS tax income the same.

  2. The Democrats will have you believe that Trump will weaken Social Security if his bill passes. How many times has that same congress diverted money from social security over the years and never paid it back. The Democrats have been the worst, by increasing taxes for everyone to pay back the money they diverted. So basically AMERICANS BAILED OUT CONGRESS TO PAY BACK MONEY THEY TOOK FROM AMERICANS. That is how politicians pay their bills. Trump is a businessman. He sees a need to get money to people to feed their kids and pay the rent. If we wait on the democrats to pass this legislation with all their add ons, it will take several months and they will have to send the money to people who live under the highway overpass. A lot of families did not survive the last time. Right now we need a businessman more than a straight-line party politician who is concerned about politics before Americans.

Leave a Reply

Your email address will not be published. Required fields are marked *