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Coronavirus Stimulus Phase 4: Payroll Tax Cut and Bailouts for State and Local Governments

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Coronavirus Stimulus Phase 4 Payroll Tax Cut and Bailouts for State and Local Governments

Coronavirus Pandemic has affected the US economy badly and which is why the Congress has given out several relief packages. More than 80 million Americans have received stimulus check payments worth $1,200 as a part of the CARES act to survive in COVID-19 situations.

Now, most of the US citizens are wondering will they get a second round of stimulus check for the general public as a part of phase four of coronavirus stimulus efforts by Congress. While it is not sure about the second round of stimulus check payments, but there will be some kind of economic assistance. It is expected that there could be a tax cut in the payroll along with bailouts for the state and local governments by the center.

Coronavirus Stimulus Phase Four will have Tax Cut in the Payroll

Coronavirus Stimulus Phase Four will have Tax Cut in the Payroll

President Donald Trump has called for a payroll tax cut as a part of coronavirus stimulus phase four efforts by the government. The main aim within the GOP is less focused on short-term efforts like second stimulus check and more on economic growth in the long-term.

There is currently a payroll tax of 6.2% for Social Security and 1.45% for Medicare, along with an additional 0.9% for the highest earners. If the taxes are suspended, employers will hire more workers as their payroll costs are lower and it will also increase the salaries of workers. While the funds for Social Security and Medicare will be allocated from some other sources or adjusted later.

Trump on Bailing out State and Local Governments

Trump on Bailing out State and Local Governments 

While the Democrats want bailouts for local and state governments, Trump has said that there will be no bailout for poorly run states.

Coronavirus is not an excuse for the badly run states, the $500 billion aid to state governments will be restricted to COVID-19 related spending, and not support their budget-mismanagement. Trump said that they are not interested in rescuing states which have made mistakes, completely unrelated to the coronavirus.

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