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Home / Business / Unemployment $ 400 Unemployment, Wage Tax Deferral: Deadline for the US Economy

Unemployment $ 400 Unemployment, Wage Tax Deferral: Deadline for the US Economy



President Trump signed executive action extending the economic relief of the coronavirus during a news conference in Bedminster, New Jersey, on August 8th.

Photographer: Jim Watson / AFP via Getty Images

President Donald Trump released Saturday’s executive action, which means a sparse support bailout for an economic recovery already stalled, as negotiations with Democrats on additional pandemic stimulus broke down.

Rearranging aid funds from the Trump disaster will provide $ 300 a week in federal unemployment assistance – down from $ 600 a week in the Care Act that expired in July. This money is caught at $ 44 billion, which at the current level of unemployment could end within one to two months.

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His next big action could have a bigger impact: he pushes the payroll tax from September to the end of the year for workers earning as much as $ 8,000 a month, which could put in an extra $ 600, at most. , in the pockets of employees. Economist Stephen Moore, a Trump ally, says he amounts to a $ 300 billion tax cut that would help the economy. However, other economists said it is unlikely to provide as much stimulus as Trump could hope.

While the actions may hurt the full relief for Americans, funding for the unemployed is much more limited than in previous months, and deferring the payroll tax will not help the tens of millions who have lost their jobs. Beyond that, the legitimacy of Trump’s actions is not entirely clear, and the moves did not include an extension of aid to small businesses that are earning little funding for advance aid.

“It’s certainly better than nothing, but it’s not a good solution for Congress to come to a clearer legal and logically possible compromise in their fiscal negotiations,” said Ernie Tedeschi, an economist at Evercore ISI.

The impact of the payroll tax deferral depends on whether employers will stop holding money from American checks, with voters in turn pressuring Congress to eventually pass legislation to forgive the accumulated amount.

Claws back

But employers may simply decide to do nothing in the face of uncertainty, for fear that if Congress fails to act, they may get stuck trying to raise money from their employees to pay their debts to the Internal Revenue Service.


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