Economy

Trump Wants Tax Cuts For Non-Existent Payrolls

SK Ashby
Written by SK Ashby

Payroll tax cuts are almost never a good idea because they do not dramatically change hiring patterns while creating new shortfalls in funding for programs like Medicare and Social Security.

Payroll tax cuts are even more useless when people don't actually have jobs.

It seems necessarily and possibly inevitable that Congress will pass another fiscal aid package of some description and, for his part, Trump says he won't sign anything that doesn't include tax cuts.

“We’re not doing anything without a payroll tax cut,” Trump said in a Fox News interview that aired on Sunday. [...]

Len Burman, institute fellow at the Urban Institute and professor at Syracuse University, said it is a “terrible idea.”

“The main problem with the proposal is that it would go to the people who least need help,” Burman said. “It seems like you’re deliberately targeting it to people who are in the best situation … the ones who are still working.”

I do not believe Trump would actually veto an aid package that doesn't include a payroll tax cut, but I wanted to highlight how monumentally stupid Trump is and take a dig at Congress in the process.

Trump clearly does not know how payroll taxes work because no one who knows how they work would call for them when a quarter or more of the country is unemployed. And a partial reopening won't make payroll tax cuts more relevant nor would they persuade employers to hire more people at a time when businesses will be restricted in capacity and in consumer demand.

Furthermore, we're already looking at a $4 trillion deficit through the end of fiscal 2020 without adding more fruitless tax cuts to the mix.

Now, there are rumblings that Congress will pass another round of funding for the Paycheck Protection Program and personally I think that's almost as useless as a payroll tax cut. A third round of funding could bring total funding for the program to nearly $1 trillion and what do we have to show for that exactly? That trillion dollars should have been just sent directly to Americans; not corporations that may or may not actually need it or use it properly. Over 90 percent of businesses owned by people of color have been unable to secure loans under the program, but politically-connected firms haven't had a problem.

I hope I'm wrong, but I think we're throwing away trillions for very little in return and the last people that will become apparent to will be lawmakers in the next session of Congress who will have to work backward and find out where all the money really went.