Trump regime: The gloom and doom talk on the economy is a plot to harm Dear Leader!
Also Trump regime: So, since the economy needs stimulus, how about a payroll tax cut?
Several senior White House officials have begun discussing whether to push for a temporary payroll tax cut as a way to arrest an economic slowdown, three people familiar with the discussions said, revealing growing concerns about the economy among President Trump’s top economic aides.
The talks are still in their early stages and have included a range of other tax breaks. The officials also have not decided whether to formally push Congress to approve any of these measures, these people said, speaking on condition of anonymity because they weren’t authorized to disclose internal discussions. But the White House increasingly is discussing ideas to boost a slowing economy, they said.
Even though deliberations about the payroll tax cut were held Monday, the White House released a statement disputing that the idea was actively under “consideration.”
“As (National Economic Council Director Larry Kudlow) said yesterday, more tax cuts for the American people are certainly on the table, but cutting payroll taxes is not something under consideration at this time,” the statement said.
The statement and the internal discussions over the payroll tax cut are part of a rapidly evolving effort by the White House to both exude confidence about the economy’s strength while simultaneously hunting for ways to bolster business and consumer confidence. Business spending already has pulled back, in part because of fears about the trade war, but consumer spending has remained robust. If ordinary Americans begin to tighten their belts later this year, the economy could suffer new strain.
Millions of Americans pay a “payroll tax” on their earnings, a 6.2 percent levy that is used to finance Social Security programs. The payroll tax was last cut in 2011 and 2012 during the Obama administration to 4.2 percent, as a way to encourage more consumer spending during the recent economic downturn. But the cut was allowed to reset back up to 6.2 percent in 2013.
Workers pay payroll taxes on income up to $132,900, so cutting the tax has remained a popular idea for many lawmakers, especially Democrats, seeking to deliver savings for middle-income earners and not the wealthiest Americans. But payroll tax cuts can also add dramatically to the deficit and – depending on how they are designed – pull billions of dollars away from Social Security.
The issues are two as I see it, first the "talks have included a range of other tax breaks" at the top there, and the fact that is designed badly, payroll tax cuts can harm Social Security. Republicans tried to claim President Obama was doing just that in 2012 before they caved for several extensions, but in 2013 when the payroll tax cut expired, the GOP slammed him hard and rode that towards a 2014 wipeout of House Democrats.
My worry is that any payroll tax cut will be a mess that the Democrats will have to fix. Again.