'Can’t someone find a way to distract President Trump from his stupid obsession with a payroll tax cut?' asks columnist hiltzikm.
Trump again demands a payroll tax cut, but it makes no sense.
Moreover, even for many workers still receiving paychecks, the tax cut would be relatively trivial. If the payroll tax of 6.2% were to be cut in half, that would give a household collecting $50,000 a year in wages a benefit this year of $1,550, or about $30 a week.Two-thirds of Trump’s payroll tax cut would go to the richest 20% of Americans, with the poorest 40% getting only 6% of the benefit. “EMP” refers to an alternative plan to provide households with targeted lump-sum assistance payments.
Labor economists frown on paycheck-based stimulus because it only gets dribbled into household budgets paycheck by paycheck. They prefer the method of stimulus programs in 2001 and 2008 and the CARES Act enacted in March. The CARES Act gave most American householdsStudies of the earlier stimulus programs found that recipients pumped as much as 90% of the lump sum payments into the economy within three months.
That explains why a payroll tax cut is disdained by economists across the political spectrum. They include Michael R. Strain, director of economic policy studies at the pro-business American Enterprise Institute.
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