Economists: Trump tax cut would do little to ease fallout

A payroll tax cut would do little to help those who have lost their jobs, and may not be enough to stave off a recession, economists say. The tax cut has been put forward in response to the coronavirus-related economic disruption around the world.

By

National News

March 11, 2020 - 10:28 AM

US President Donald Trump listens as Vice President Mike Pence speaks about the COVID-19 (coronavirus) alongside members of the Coronavirus Task Force in the Brady Press Briefing Room at the White House in Washington, DC,Monday. Photo by Saul Loeb/AFP via Getty Images/TNS

WASHINGTON — A payroll tax cut that President Donald Trump is pushing for in Congress would get money into consumers’ hands quickly but wouldn’t help those who’ve lost their jobs and may not be enough to stave off a recession, according to economists.

Cutting or suspending the payroll tax is one of the main ideas put forward by the president as his administration and Congress try to respond to the economic disruption caused by the spreading outbreak of the novel coronavirus.

“It presumably makes life incrementally easier for people who are working,” said Gordon Gray, director of fiscal policy at the right-leaning American Action Forum. “That’s presumably not the policy you need to pursue if people are out of work from a pandemic.”

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