Editor’s note: President Trump recently has floated – and then rejected – a number of ideas to jumpstart a stalling economy. Richard L. Kaplan, the Guy Raymond Jones Chair in Law at Illinois, is an internationally recognized expert on U.S. tax policy. In an interview with News Bureau business and law editor Phil Ciciora, he discusses the implications of cutting the payroll tax.
Is the idea of cutting payroll taxes sound policy or more of a last-gasp attempt to stave off a recession?
Politicians always want to be seen as doing something, and cutting the payroll tax could represent the middle-class tax cut that the president campaigned on and then largely forgot about in 2017.
But to the extent that the president thinks this is necessary to stimulate the economy and prevent the U.S. from tipping over into a recession, the bigger question is, why wasn’t this included in the Tax Cuts and Jobs Act of 2017? This proposal is a tacit admission that the 2017 version of tax reform didn’t do much for working people. In any case, it doesn’t look like Congress would enact anything the president proposes.
Read the full interview at news.illinois.edu.