Listen: Why Trump's payroll tax cut wouldn't do much for the economy
"So with the attention on the payroll tax. Let's find out a little more. We're about it and joining us to talk about. All of this is n._p._r. Chief economics correspondent scott horsely. Hi scott good to be with you. Yes so people might have a vague vache understanding but for those who don't know what exactly is the payroll tax. This is a broad-based tax is paid by just about anyone who gets a paycheck. Even people who maybe you don't make enough money to have a liability for the federal income tax still pay the payroll tax. It's twelve point four percent that goes to fund social security and two point eight nine percent that goes to fund medicare now typically your employer pays half of that and the employee pays half the employees portion is what you see as feick <hes> on a pay stub if you're still getting old fashioned patient yeah so if the payroll tax cut work hutt <hes> sorry if the payroll tax were cut the committee for a responsible federal budget says the u._s. treasury could lose between seventy and seventy five billion dollars in annual revenue for each percentage percentage point. The payroll tax is reduced. Explain how this could impact the u._s. Economy well it would <hes> obviously widen the federal deficit which is already more than a trillion dollars a year another way to look at it though is that seventy to seventy five billion dollars that would be left in workers paychecks <hes> for every one percent point. It's cut off the payroll tax. <hes> that's additional money that presumably could be pumped in the economy if consumers went out and spent that the thing is has <hes> to the extent that there is weakness in the u._s. economy right now. It's not coming from the consumer. Side consumers are spending at a pretty healthy clip. It's really businesses businesses that are dialing back their spending and that's that's one reason we are seeing some slowdown in economic growth <hes> it's possible that consumers could make that up if you left a little more more money in their wallet <hes> but but not necessarily some of them might just decide to to to save that money and then in that case it wouldn't have much impact on the economy. The payroll tax was previously xlii cut eight years ago in twenty eleven during the obama administration and that revenue was redirected to social security programs but the cut did add add to the deficit <hes>."