With WHO finally classifying China’s coronavirus as pandemic, U.S. Senate Finance Committee Chairman Chuck Grassley stated, a payroll tax cut was among the options being tabled to offset the economic impact of the coronavirus.
“If you’re going to negotiate in good faith, you’re going to listen to everybody and pick out what you think can do the most good to help the economy over a hump,” said Grassley even as Democrats in the U.S. House of Representatives moved to push through a broad package of proposals to help Americans affected by the outbreak.
“It’s on the table,” said Grassley. “It’s something that at least has bipartisan support because it was used during the Obama administration.”
Payroll taxes are used to fund Social Security for retirees and Medicare, as well as for the government healthcare program for the elderly, and provides 18% of the U.S. population with health insurance.
According to U.S. government figures, nearly 90% of Social Security’s budget came from payroll taxes with funding for Medicare pegged at 36% from payroll taxes in 2018, said Peter G. Peterson Foundation, a Washington think tank.
According to a Bloomberg News report, Grassley stated rumors that there was not enough support for President Donald Trump’s idea of easing payroll taxes was not correct, was incorrect.
When asked if he thought a payroll tax cut would be an effective way to stimulate the economy, Grassley responded by saying, he had not read any deep analysis on that issue since 2009 and was not sure if it would help the economy.
He went on to add, he does not see any pitfalls with the Trump administration’s proposal to extend the April 15 tax deadline since the move would keep money circulating through the economy longer.
Although he had not seen the full package of proposals being pushed by House Democrats, he does not expect the Republican-controlled Senate to back it unless it won support from the White House.