"If No Payroll Tax Cut, Trump Vetoes Stimulus Bill... A Bold Move"

Congress Pressure Ahead of Unemployment Benefits Expansion Ending
Consumer Spending Expected to Rise if Passed
Democrats Counter Biden's Tax Increase Pledge
Ambiguous Response to Question on Acceptance if Losing Presidential Election

[Image source=Yonhap News]

[Asia Economy New York=Correspondent Baek Jong-min] Ahead of the presidential election in November, U.S. President Donald Trump has launched a campaign to win voters with a tax cut card. He took a tough stance, saying he would not sign the economic stimulus bill being pushed by the administration and Congress unless payroll taxes are lowered.

In a pre-recorded interview aired on Fox News on the 19th (local time), President Trump said, "I am considering not signing the stimulus bill if it does not include a payroll tax cut." He emphasized, "Many Republicans want it."

Unlike income tax, payroll tax is a tax imposed at a single rate for social welfare, similar to our national pension. It deducts 7.65% from wages, combining 6.2% for Social Security tax and 1.45% for Medicare tax. President Trump's plan is to temporarily reduce this to zero (0). During the Barack Obama administration, payroll tax was lowered to 4.2% to stimulate consumption that had contracted after the global financial crisis.

President Trump announced the payroll tax cut policy in March when the New York Stock Exchange plummeted due to the COVID-19 outbreak. However, opposition spread not only from the Democratic Party but also within the Republican Party to which the president belongs, and the plan was not realized. Concerns grew that exempting payroll tax would lead to a shortage in social welfare budgets and further expand the fiscal deficit.

Instead, the U.S. government has been providing an additional $600 weekly unemployment benefit to overcome the economic crisis caused by COVID-19. This became the foundation supporting consumption amid an unprecedented unemployment situation. When the expanded unemployment benefits were combined with a cash payment policy of $1,200 per adult nationwide, consumer spending surged by 18.2% in May compared to the previous month and by 7.5% in June.

President Trump has brought out the payroll tax cut card again because the stimulus package is set to expire at the end of this month and he is mindful of his competitor, Democratic presidential candidate Joe Biden. The U.S. Congress has passed four stimulus bills so far, allowing the government to spend $3 trillion. However, with the end of the expanded unemployment benefits just ten days away, an additional stimulus bill has become necessary. In the new stimulus bill, he expressed his determination to have his will reflected.

Also, ahead of the election, he can clearly establish a confrontational stance with Biden on economic issues. Biden has pledged to raise corporate tax rates if he wins the election. Facing increasing pressure as the gap in approval ratings widens, President Trump can attempt a turnaround on tax issues.

However, it is uncertain whether President Trump's wishes will be reflected. The positions of both the Republican and Democratic parties, which are coordinating the stimulus bill, have not easily narrowed.

The Democratic Party insists on extending the expanded unemployment benefits for six months. The Republican Party and the White House oppose the extension. The Washington Post reported that within the Republican Party, there is consideration of reducing the current weekly $600 unemployment benefit to $200-$400, and President Trump's remarks came amid this situation.

According to Bloomberg News, Treasury Secretary Steven Mnuchin and Republican leaders of the House and Senate are scheduled to meet at the White House on the 20th to discuss additional stimulus measures. White House Chief of Staff Mark Meadows is also expected to be involved in this agreement.

Denial of Poor Approval Ratings and Ambiguous Answers on Whether to Accept Election Results

In the interview that day, President Trump left a strange impression regarding the post-election situation. When asked if he would accept the results if he lost, he said, "I am not someone who accepts (defeat) cleanly," and repeated that he "hates losing," which was interpreted as suggesting the possibility of refusing to concede the election.

When interviewer Chris Wallace asked, "Are you implying that you might not accept the election results?" Trump replied, "No. I have to see," refusing to give a clear answer. When the interviewer pressed again, "Will you accept the results?" he only said, "No. I won't say yes, and I won't say no."

President Trump also claimed that the widening gap in approval ratings between him and Biden is not real, saying, "I am not losing. Those are fake polls." According to a Washington Post poll released the previous day, the gap in approval ratings between President Trump and Biden had widened to 15 percentage points.

This content was produced with the assistance of AI translation services.