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Because Trump isn’t getting the wage tax cut he wanted for the coronavirus

But the only thing both sides in Congress immediately agreed on is that they don’t want to give it to them. Why? On the surface, it looks nice: more money in the pockets of Americans and employers to help stem a bearish stock market and an economy that will soon feel the brunt of cancellations everywhere, and is probably already in a recession.

But Congress says it is an expensive and unrealistic effort that could affect the real economic struggles that coronavirus brings to Americans. Here’s why Trump didn’t get his payroll tax cut in this round of legislation and probably won’t:

Any tax relief on salaries would come from the social security fund: This would risk severely denting or even depleting it, which means that people who depend on their social security check every month may not get it in the worst case. This is the main reason why Republicans are opposed to a cut, said one senior aide in the Republican Senate.

It’s super expensive: Eliminating the wage tax for both employees and employers would cost the government about $ 90 billion a month, according to congressional aides. Multiply that for the whole year and you’re seeing around $ 1 trillion of lost public revenue. Jim Tankersley of the New York Times put it into perspective: it is much more than the 2008 Wall Street bailout or the 2009 bill to support the economy after the crash that triggered the Great Recession.

It would increase most wages by 7.65 percent, but this does not help move workers or those who rely on suggestionsSenator Ron Wyden (D-Ore.), the Democratic top of the Senate financial committee, said on Wednesday. This is because most of their money does not come from payroll.

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Help only the people who are working now: So if you are unemployed – or have lost your job due to the coronavirus – this would not help you. And from the Democrats’ point of view, it could distract from the real goal they want: compulsory paid sick leave.

“If a single mother receives a notice from school, her son must stay home, he will not receive a wage tax deduction or a refund if he loses his job,” Sen. Kirsten Gillibrand (DN.Y.) said on Friday. MSNBC.

Here is how Charles E. Schumer (DN.Y.), leader of the Senate minorities, describes the idea of ​​a reduction in wages tax: “We don’t think they should simply throw money out of a plane and hope that it will end a little about the people who are interested. “

Republicans don’t have the same voice about their opposition to this, given their reluctance to upset Trump. But behind the scenes, this is not something they are seriously considering, no matter how much Trump tweets it or asks Congress for it in national addresses.

And it looks like in the next week, Republicans and Democrats could move on to a coronavirus aid package that offers Americans everything from extended unemployment insurance to paid sick leave and food aid – but not a breakdown of their payroll taxes. .

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