How Payroll Tax Cuts Aid 140M Workers

President Trump recently delivered on our recommendation to suspend the payroll tax. His executive order defers payroll tax obligations for employees earning less than $104,000 (about 90 percent of all American workers). Combined with the employer payroll tax relief in the CARES Act, which passed by a strong bipartisan vote, the president's order will provide meaningful tax relief to nearly all working Americans. This tax cut will significantly boost the economy and accelerate its recovery. 

Now employers from Wall Street to Main Street must act to comply with this executive order and suspend employee payroll tax withholding to boost their workers' net pay. The president can help make employers comply by issuing directives to the Treasury and IRS to instruct businesses that they are prohibited from withholding payroll taxes from workers' paychecks through year-end and that they will not be held legally liable for collecting suspended payroll taxes paid to employees. These directives can turn the tax deferral into a de facto tax cut. Ultimately, employers, employees, and voters who want a vibrant small business-led economic recovery should vote to make this tax relief permanent on Election Day.