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Trump Goes All In on Payroll Tax Cut Despite Skeptical Congress

Posted on July 17, 2020

Congress must include a payroll tax holiday in the next coronavirus relief package or it won’t make it past President Trump’s desk, according to the White House.

The payroll tax proposal would be one way of providing relief to working Americans during the pandemic, and Trump “believes it must be part of any phase 4 tax package,” White House spokesman Judd Deere told Tax Notes.

The July 16 statement from the White House came in response to media reports citing administration officials saying that Trump will refuse to sign a phase 4 relief package if it doesn't include a payroll tax cut. The president and his advisers have regularly called for a temporary payroll tax cut since the start of the pandemic, but the statement cements the White House’s negotiating position.

However, top taxwriters in the Senate remain unenthusiastic about the idea.

“Five months into a once-in-a-century economic crisis, Donald Trump still has only one idea: tax cuts,” Senate Finance Committee ranking member Ron Wyden, D-Ore., said in a statement. A payroll tax cut would do little to help workers working reduced hours, and nothing for workers who have lost their jobs, he added.

Instead, Wyden continued, lawmakers should “extend supercharged unemployment benefits,” which he said do more to sustain the economy and protect families.

A spokesman for Finance Committee Chair Chuck Grassley, R-Iowa, said only that Grassley looked forward to the upcoming negotiations, and that “a number of tax relief proposals will be part of the discussion.”

Follow Jonathan Curry (@jtcurry005) on Twitter for real-time updates.

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