Second round of stimulus checks depends on payroll tax cuts, White House says

News

Will there be a second round in May?

Young Japanese girl receiving her paycheck from her manager

WASHINGTON (BRProud) — As we enter May, a select group of people are still waiting to receive their stimulus payment, but is $1,200 enough to get people through the pandemic? As Congress mulls over a second round of stimulus payments, President Donald J. Trump wants payroll tax cuts to be a part of the relief package.

“I told Steve [Mnuchin, Treasury Secretary], we’re not doing anything unless we get a payroll tax cut. That is so important to the success of our country.”

President Trump on Fox News, May 3

How do payroll tax cuts affect American workers?

Payroll taxes include:

  • Social Security payments: 6.2% of employee paychecks, up to $132,900
  • Medicare payments: 1.45% of paychecks
  • People making over $200,000—or $250,000 for couples filing jointly—pay an additional 0.9%
  • Employers match those payments of 6.2% and 1.45% toward Social Security and Medicare, respectively

If Social Security and Medicare taxes aren’t taken out of paychecks, American workers and businesses take home more money every pay period, while shorting funding for those vital programs for seniors.

Cutting payroll taxes could encourage the labor force to spend more money and curb a recession. Business owners with more money might hold off on future lay-offs.

However, these cuts do not affect tipped workers, those paid under the table, or the unemployed, a significant portion of the American workforce. Those opposed to a payroll tax cut say it would do nothing to help those who are unemployed due to the pandemic.

Roughly 30 million Americans have filed for unemployment benefits in the last six weeks—many from the restaurant, hospitality, and tourism industries. The Labor Department will release its latest measure of the national unemployment rate on Friday.


County-by-county Coronavirus Tracker
COVID-19 Resources
More Coronavirus Coverage from News10
Updates from schools on COVID cases


LATEST STORIES

Copyright 2020 Nexstar Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

Click Below to set up your cable box

Download our news app

App Store Link
Google Play Link

Coronavirus Outbreak

More Coronavirus Outbreak

Classroom Progress Report

More Classroom Progress Report