White House economic adviser Larry Kudlow is estimating that President Donald Trump’s executive order to suspend the payroll tax cut will be worth $1,200 per worker.
Kudlow was pressed on his previous claim he made in 2009 that a payroll tax cut could be a “very weak-kneed economic stimulant” during an appearance on CNN’s “State of the Union” on Sunday.
“Alls I saying then [sic] is there’s stronger tax cut measures that would have bigger effects throughout the economy,” Kudlow responded. “But, you know I said that, you couldn’t foresee what’s happened with the virus and COVID.”
“Now look, at this point as I’ve said, it would probably be worth $1,200 per worker,” Kudlow said as he explained why he feels the payroll tax cut is effective now.
While he admitted that there are still roughly 16 million unemployed Americans, he noted the economy has added 9 million new jobs over the past few months. Additionally, he expressed his belief that “we are in, I believe, strong, self-sustaining V-shaped recovery.”
However, when pressed on the bleak unemployment numbers, Kudlow pointed to several other executive orders, Trump signed aimed at providing relief to Americans out of work.
“With respect to the payroll tax, basically we’re giving 140 — some odd — million people who worked through this pandemic — they’re heroes — we’re giving them about a $1,200 wage increase — after-tax,” Kudlow said.
Watch the video below:
“I think what he was saying is that the deferral of the payroll tax to the end of the year will be made permanent…the tax is not going away," WH economic adviser Larry Kudlow says Pres. Trump’s promise to cut payroll taxes permanently will not impact Social Security or Medicare. pic.twitter.com/IYTpfW2IRi
— State of the Union (@CNNSotu) August 9, 2020
When pressed on how Trump’s order to defer the payroll tax is Constitutional, Kudlow said, “Well look, it’s a deferral. It’s not a tax rate change. I understand it will be challenged in the courts. We’ll see what happens.”
He also said administration officials believe the Treasury Department has the authority to suspend taxes temporarily.
Kudlow was also pressed on Trump’s apparent vow to make the payroll tax cut permanent. He said he believes Trump did not mean to say he would make the tax cut permanent.
Instead, he claimed Trump was vowing to ensure that Americans do not have to pay the tax that was deferred.
