Best coronavirus ‘stimulus’ is getting back to work: Rep. Jim Jordan
Rep. Jim Jordan, R-Ohio, argues Congress needs to get back to work and reopen the economy. He also provides insight into former National Security Advisor Gen. Michael Flynn, who may be exonerated this week.
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As lawmakers and the Trump administration work together on potentially assembling another stimulus package, there are a number of tax measures that have been floated by members of the administration that could be included.
The package would come as a number of states have already begun reopening their economies, which experts are hopeful will begin to help the U.S. economy bounce back from the devastating blow it has been dealt by the coronavirus pandemic.
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While a number of measures have been floated to help accelerate growth, there is a growing movement among some Republicans to limit spending and to focus on other pro-growth policies, especially since the federal government has already spent about $3 trillion on relief measures.
Former Trump Senior Economic Adviser Steve Moore recently shot down talk of investing in infrastructure as one possible measure, which has been mentioned by President Trump on multiple occasions, saying that there should be “no more spending.”
Here’s a look at some other tax measures that have been suggested to help businesses and workers as the economy slowly begins to reopen.
Payroll tax cut
Moore told FOX Business that Republicans are “rallying around” a suspension of the payroll tax as opposed to continued government spending.
“I think that’s going to be the big battle in the weeks ahead, do we do the payroll tax cut or do we have more government spending,” Moore said.
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The payroll tax is paid separately from federal income taxes and funds Social Security and Medicare. Employers and employees each pay 6.2 percent for Social Security, and 1.45 percent for Medicare, and an additional 0.9 percent is levied on the highest earners.
A suspension of the payroll tax would incentivize employers to hire more workers by reducing their payroll costs, the former White House adviser added, while giving employees a boost in their paychecks.
Addressing concerns that Social Security and Medicare funding would be harmed in the process, Moore said the government could shift funds to cover any holes.
It has been previously suggested that companies would eventually be responsible for repaying the money to Social Security and Medicare, just at a later date.
Full, immediate expensing
In an effort to assure U.S. companies move production back home, White House economic adviser Larry Kudlow told FOX Business that one pro-growth policy he would like to pursue is an expansion of 100 percent immediate expensing.
“One-hundred percent immediate expensing across the board – plant, equipment, intellectual property, structures, renovations – in other words, if we had 100 percent immediate expensing we would literally pay the moving costs of American companies from China back to the U.S.,” Kudlow said.
The 2017 Tax Cuts and Jobs Act allowed businesses to immediately write off the cost of some items, including equipment. Kudlow’s proposal expands the type of items that would be able to be deducted.
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Deduction for corporate business meals and entertainment
As previously reported by FOX Business, Trump has advocated for bringing back a deduction for business meals and entertainment in an effort to restore the restaurant sector, which has taken a crushing hit from measures implemented to prevent the spread of coronavirus.
Under the Tax Cuts and Jobs Act, Congress repealed the entertainment deduction. That caused confusion as to whether business meals were still deductible.
The IRS issued guidance on business meals in 2018 indicating 50 percent of the expenses remained deductible – as long as the meals were not “lavish” or “extravagant" and other criteria were met.
Because any expenses related to activities generally considered entertainment, amusement or recreation were still not deductible, the scope of the business meal provision was limited. When a business meal was considered entertainment, for example, remained unclear.
Limit corporate liability
Another concern that employers have about reopening and rehiring staffers is that they could be on the hook if employees get sick – and could face lawsuits.
Moore told FOX Business providing a “blanket shield” to employers when they start rehiring workers is “essential to the recovery” because they cannot be sued by lawyers every time a worker falls ill.
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