Two prominent analysts have claimed President Trump can enact his long-desired payroll tax cut by using emergency executive powers.
The president and some Republicans have championed a payroll tax cut or payroll tax holiday as a way to help working people stay in their jobs amid the economic chaos wrought by the coronavirus pandemic.
Last Thursday, however the White House reluctantly dropped its bid to cut Social Security payroll taxes as Senate Republicans unveiled a $1 trillion COVID-19 rescue package.
However, Stephen Moore — a co-founder of the conservative Club For Growth and a former adviser to both Trump and Ronald Reagan — and Phil Kerpen, the president of the Committee to Unleash Prosperity, laid out how Trump could make the tax cut come to pass.
Moore and Kerpen explained in The Wall Street Journal that Treasury Secretary Steve Mnuchin has the power, enunciated in Section 7508A of the U.S. Tax Code, to postpone the IRS’ “performing [of] certain acts … for a taxpayer determined by [Mnuchin] to be affected by a federally declared disaster.”
An example of this, they noted, was the IRS’ decision to delay this year’s Tax Day to July 15 from the usual date of April 15.
“The president needs to pull an end run, and there’s a legal way to do that,” Moore and Kerpen wrote. “He should declare a national economic emergency and announce that the Internal Revenue Service will immediately stop collecting the payroll tax.
“To protect benefits,” they continued. “[Trump] should order Treasury to put bonds into the Social Security and Medicare trust funds.”
Moore and Kerpen noted that President Obama had done just that in 2011, making a similar move by Trump harder for presumptive Democratic nominee Joe Biden to reasonably object to.
“That would make the election a referendum on middle-class taxes. Mr. Trump can give Americans a tax cut now, and sign it into law later,” Moore and Kerpen wrote. “This bold act would flip the political tables. Democrats can’t credibly call it a tax cut for the rich.”
