Economy

Proposed Payroll Tax Cuts Could Make Paychecks Larger

President Trump's Proposed Payroll Tax Cuts Could Make Paychecks Larger

If the coming pandemic relief package does not come with a payroll tax cut, President Trump has indicated this week that he will not sign the legislation. The president’s past advocacy for this approach, which could make paychecks lager for workers, has encountered bipartisan resistance, CNBC reported.

Tax Foundation Senior Policy Analyst Garrett Watson said per the report, “Both sides have said it’s not well-targeted.” Watson noted, “The benefits primarily would accrue to folks who already are working, and we currently have record unemployment.”

Workers and employers divide up payroll taxes among each other. Those revenues go to fund government programs — Medicare and Social Security for the most part. The taxes are in addition to the state and federal withholdings of workers.

Legislators are also mulling other approaches to assist Americans such as putting forward further jobless benefits. But some note that move could inspire individuals to remain in their residences to steer clear of COVID-19. Another approach could be a bonus for returning to work.

Senate legislators, for their part, are believed to put forward a stimulus bill in the week to come as the American economy is having difficulty during COVID-19 and jobless claims keep coming out above 1 million on a weekly basis.

It is anticipated that Mitch McConnell (R-Kentucky), the majority leader of the Senate, will present legislators with a draft of stimulus legislation written by Republicans with the advice from the White House.

In June, news surfaced that the newest pandemic stimulus package would have to wait until July when Congress comes back from recess. At the time, it was noted that the House and Senate were forecasted to be back on Capitol Hill on July 21.

The date was said to be under two weeks from the time that some CARES Act programs are set for expiration like the $600 weekly federal jobless payments.

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