- Several Trump administration officials are weighing whether to propose a temporary payroll tax cut to inject more consumer cash into a weakening economy, according to The Washington Post.
- The Post described the discussions as preliminary. Any proposal would require Congress to sign off on it.
- A White House official denied The Post's report, telling INSIDER that cutting payroll taxes "is not something under consideration at this time."
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Several Trump administration officials are weighing whether to propose a temporary payroll tax cut to inject more consumer cash into a weakening economy, according to The Washington Post.
The Post described the discussions as preliminary. Any proposal would require Congress to sign off on it. President Donald Trump has not given the green light yet for the idea.
A White House official denied The Post's report, telling INSIDER that cutting payroll taxes "is not something under consideration at this time."
Tens of millions of American workers pay the 6.2% tax, which the federal government levies on wages to fund Social Security, Medicare, and other social insurance programs. Seventy-seven percent of tax filers in the US are projected to pay some amount of payroll tax in 2019, data from the Tax Policy Center shows. Depending on how such a tax cut were structured, it could run into opposition from Democrats who recoil from reducing funding from Social Security and Medicare.
During the 2018 fiscal year, the federal payroll tax generated $1.17 trillion, or about 6% of the US's gross domestic product, according to the Center on Budget and Policy Priorities. Lower-income Americans pay more of their incomes in payroll taxes, given it's a regressive tax, or one applied at a uniform rate.
Fears of a recession are mounting within Trump's inner circle of aides, and The Post's report comes with officials seeking ways to salvage confidence in the economy. The Associated Press reported on Monday that 74% of economists surveyed by the National Association for Business Economics expected a recession in the US by the end of 2021.
The payroll tax cut was temporarily reduced to 4.2% in 2011 and 2012, and the Obama administration allowed it to reset back up in 2013.
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