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The cost of a payroll tax cut or holiday would depend on how much of the tax is rolled back and for how long.
What is payroll tax cut holiday. Assuming it s a 100 cut then someone making 15 per hour and. It s not clear if trump is pressing for a 100 payroll tax cut i e no tax is taken out of your paycheck or only a partial cut. Even a smaller tax cut such as reducing the payroll tax by one percentage point would cost between 50 billion and 75 billion per year.
A 2 cut for employees as president barack obama did cost 150 billion in government revenue over a year and 300 billion if the employer portion had also been cut according to bloomberg data. We ve offered a payroll tax holiday so that you come back to work and those folks will get a higher after tax wage 7 6 higher kudlow told reporters at the white house. Treasury bond rates are at all time lows policymakers should still consider the most efficient ways to boost the economy per dollar of forgone revenue.
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