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Trump Promises Cuts to Payroll Taxes - Is This An Economic or a Political Move?

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@asteroids
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Trump just signed a directive today that allows for the postponement of payroll taxes - among other things. Along with his signature, he gave a few words about his plans and how he aims to help the working class citizen get more money in their pocket (or keep more money in their pocket) with a mixture of both temporary and permanent reforms.

"Trump unexpectedly promised the policy action as he signed a directive that aims to help cash-starved Americans amid the coronavirus pandemic. The order allows workers to postpone their payroll tax payments into next year but doesn’t absolve their bills outright — though the president said he would seek to waive what people owe if he prevails on Election Day." Post

The coronavirus has wreaked absolute havoc on the economy in the U.S. We're seeing an economic drought on many levels and we are seeing the continual widening of wealth inequality between working class citizens and the class of citizens who own assets.

Asset prices are rising, but many working class Americans barely get by paycheck to paycheck - with nearly 40% of all U.S. citizens being unable to come up with $400 for an emergency (and this figure was pre-pandemic)

"For now, the exact workings of Trump’s order remain unclear. Typically, employers automatically deduct payroll taxes from their employees’ paychecks and send that money directly to the federal government. Under Trump’s order, however, those payments are postponed between September 1 and the end of the year. Trump said Saturday it would result in “bigger paychecks for working families,”

I believe this is both a political move on Trump's part and a move to actually boost economic activity. In a time like this, economic activity needs a kick in the ass and one of the many ways to do that is to put more money in the average man/woman's pocket.

With trump's order today and his words about future policies (if he's elected), I believe that his push to put more cash in the everyperson's pocket might actually be a great strategy from both a political and economic standpoint.

“Even if people were to see a bigger paycheck in a number of weeks, the underlying policy is really poor policy,” she said. “The people who would be seeing the biggest increase in their paychecks still have jobs, still have earnings … People who lost jobs or retired or get income from other sources would see no help from this.”

Of course, this is trump... Anytime the man says something, there is backlash. Sometimes this backlash makes sense and other times it makes no sense whatsoever.

This statement makes no sense to me.

"People who lost jobs or retired or get income from other sources would see no help from this."

People who lost jobs would see help from this if it actually spurs economic activity by causing more spending and thus more job creation and businesses reopen and accept the influx of customers.

Some people are blind. I'm no fan of trump, but I am a fan of putting more money in the hands of consumers and less in the hands of the government.

Posted Using LeoFinance