More than two dozen powerful business groups, including the National Association of Manufacturers, the National Retail Federation, and the U.S. Chamber of Commerce, have said that thousands of U.S. businesses would not participate in Donald Trump’s proposed payroll tax holiday.
The groups called the plan “unworkable” and warned it could burden workers with future obligations they would have trouble paying back, in a letter sent to treasury secretary Stephen Mnuchin in early August.
As an example, the letter cited the case of a person making $35,000 a year who would see a pay increase of $83 this year but would owe an additional $751 next year when it came time to make up this year’s missed withholdings.
“Many of our members consider it unfair to employees to make a decision that would force a big tax bill on them next year,” the letter said. “It would also be unworkable to implement a system where employees make this decision.”
“Therefore, many of our members will likely decline to implement deferral.”
Congress, not the president, has the power to suspend payroll taxes. Trump had assumed business and public pressure for financial relief would sway Congress to accede to his proposal.
Associations signing the letter represent contractors, drug stores, footwear makers, restaurants, and winemakers, among others.
TREND FORECAST: In an effort to secure votes, Washington will engineer another multi-trillion dollar government bailout before Election Day 2020. While the vast majority of the funds will again go to large corporations and special interests, the “tips” tossed to the general public will generate popular approval.
