Trump proposes payroll tax relief
President Donald Trump has floated the idea of a payroll tax cut in response to the spreading coronavirus epidemic.
Zeke Miller reported the news for the AP:
President Donald Trump said Monday his administration will ask Congress to pass payroll tax relief and other quick measures as a public health and economic maelstrom brought on by the coronavirus drew closer to him personally.
Intending to calm the fears of financial markets over the impact of the epidemic, Trump told reporters he is seeking “very substantial relief” to the payroll tax. Trump also said he was seeking help for hourly-wage workers to ensure they’re “not going to miss a paycheck” and “don’t get penalized for something that’s not their fault.”
He stepped forward with the contours of an initiative after markets dropped sharply and as the outbreak spread. Several Trump confidants in Congress disclosed they were isolating themselves after potential exposure to the virus; one traveled with the president from Florida on Air Force One on Monday; another was his just-tapped new chief of staff.
Trump said he would hold a press conference Tuesday to outline the proposals, saying his administration and Congress would be “discussing a possible payroll tax cut or relief, substantial relief, very substantial relief, that’s big, that’s a big number. We’re also going to be talking about hourly wage earners getting help so that they can be in a position where they’re not going to ever miss a paycheck.”
The Hill’s Scott Wong wrote:
House Democrats on Monday night balked at President Trump’s proposed payroll tax cut designed to help shore up the economy amid the coronavirus outbreak.
After the worst day on Wall Street in more than a decade, Trump said he would ask Congress to pass an emergency economic package that includes both a payroll tax cut and relief for hourly workers to fight the economic fallout from the coronavirus.
But Democrats argued that cutting the federal payroll tax would not help people who have lost their jobs in this sudden downturn, or who are part of the gig economy and do not get paid by the hour.
Asked if the payroll tax cut was dead on arrival on Capitol Hill, Rep. Gregory Meeks (D-N.Y.) replied: “I think so.”
“I see folks who are being devastated, who are either losing their jobs temporarily or their hours are being cut, and there is nothing being done to help them get back on their feet,” Meeks said in an interview outside the Capitol.
“We have to figure out where we can get more revenue that can make a difference for them. Payroll taxes — I don’t know if that’s the best way to go,” said Meeks, adding that rolling back the 2017 Trump tax cuts would raise more revenue to help affected workers.
Fred Imbert, Yun Li, and Silvia Amaro from CNBC reported on the stock market’s reaction:
Stock futures rallied back early Tuesday morning after the S&P 500′s worst day since the financial crisis as investors cheered potential stimulative measures to stem the economic downturn from the coronavirus.
Around 7 a.m. ET Tuesday, futures on the Dow Jones Industrial Average indicated an opening surge of 1,079 points on Tuesday. S&P 500 futures and Nasdaq 100 futures also pointed to a sharply higher open for the two indexes on Tuesday.
President Donald Trump floated on Monday the idea of “a payroll tax cut or relief” to offset the negative impact from the coronavirus. The potential tax incentives come on top of an $8.3 billion spending package Trump signed last month.
The market suffered a historic sell-off in the previous session, with the Dow and the S&P 500 plunging 7.8% and 7.6%, respectively, both posting their worst day since 2008. The Dow’s 2,013-point drop was also the biggest-ever point drop for the 30-stock average.