COVID-19 Stimulus Round 4, which plan will go into effect?  Many people have been looking forward to the government’s next round of COVID-19 stimulus– sadly, the fourth wave of COVID-19 relief and the laws around it have become highly politicized and appear to be caught in gridlock between the House and Senate.

While both Republicans and Democrats appear to support additional $1,200 economic impact payments, an extension of unemployment and expansion of the Payroll Protection Program, the common ground seems to crumble along with the details of rolling it out.

CARES vs. Heroes vs. HEALS Acts: What’s the difference?[1]

The President’s Option

As the House and Senate continue to bash heads, the President waits for something to sign.  If a solution is not reached soon, he’s also floated the idea of unilaterally enacting his own relief packages. “A lot of people are going to be evicted, but I’m going to stop it, I’ll do it myself if I have to”, “I have a lot of powers with respect to executive orders, and we’re looking at that very seriously right now.”[2] Not only would the president’s executive order focus on an eviction moratorium but would focus on payroll tax holiday as well.

Halting payroll taxes would increase each employee’s take home pay by 7.65% immediately. Businesses would also save 7.65% of their current payroll costs. Small businesses would have a huge boost as self-employed individuals would increase their take home pay effectively by 15.3%.[3]

Despite the President’s claims that he has the authority to create a payroll tax holiday, it has not been met without opposition. Traditionally Congress is the one that has the responsibility to create and repeal taxes; however, the President does have the authority to postpone the collection of tax.[4] We saw this once already as the April 15^th filing deadline was pushed back into July this year. Regarding the President’s ability to postpone tax deadline, (including payroll tax), Economist Stephen Moore says “This was put in the tax code as an emergency procedure… The President has the unquestionable authority, not to cancel a tax, but to suspend the payment of the tax until the crisis is over.” Moore also suggests that the President could forgive the tax at the end of the suspension period.[5]

We leave it to you, which solution do you feel would work the best?

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[1] https://www.cnet.com/personal-finance/heals-vs-cares-vs-heroes-stimulus-packages-key-differences-between-democratic-and-republican-proposals/

[2] https://www.foxbusiness.com/economy/trumps-weighs-executive-action-to-suspend-evictions-payroll-tax

[3] https://www.irs.gov/taxtopics/tc751

[4] https://www.irs.gov/pub/irs-drop/rp-01-53.pdf

[5] https://video.foxnews.com/v/6178164298001#sp=show-clips

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