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Many people are eagerly awaiting to see what will happen with the next stimulus package.
There have been talks and proposals among Democrats of providing people with stimulus checks of as much as $2,000 per month for the next six months. Meanwhile, many in the GOP party do not want to go this route and do not support such heavy funded stimulus packages for more stimulus checks.
Instead, they would like to focus spending on other areas or perhaps just offer different strategies for getting the economy back to normal.
One of the strategies that could be a likely outcome is cutting payroll taxes. (This is the approach that President Trump recently showed support for over offering more stimulus checks).
Payroll taxes are separate from federal income taxes and these taxes are used to fund programs like Social Security and Medicare.
Employers and employees each pay 6.2 percent for Social Security and 1.45 percent for Medicare (there is also an additional 0.9 percent paid by the highest earners).
If these taxes are not required to be paid by employers, then the thinking is they will be able to hire back more of their workers and get things moving again in the economy.
This could also work to provide employees with a boost in their paychecks since those taxes would not be coming out so this could function similar to another round of stimulus funding in that it would result in more money back in the pockets of employees.
This proposal is not without criticism, however.
Many people believe that it puts these vital programs like Social Security and Medicare at risk. With those programs not being supported, many question whether or not those programs can survive.
But there is a route where those programs won’t have to suffer for long. There is some talk that employers will have to eventually pay back these taxes, so it would be more of a deferment than a “cut.”
The deferment of these taxes might be the best option since in the long-run it would (in theory) not hurt those programs that millions of Americans depend on. And at the same time it could result in immediate increased income for lots of Americans and allow many Americans to get their jobs back.
Of course, if businesses are not allowed to open back up then they will not be in the position to hire anybody or increase wages so it seems like the strategy hinges on us keeping the virus under control, as states re-open.
Still, it is possible that another round of funding could come in the form of checks to Americans. We will just have to wait and see how the discussions develop between the Senate and House of Representatives over the next week.
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Daniel Gillaspia is the Founder of UponArriving.com and creator of the credit card app, WalletFlo. He is a former attorney turned full-time credit card rewards/travel expert and has earned and redeemed millions of miles to travel the globe. His content has been featured in major publications such as National Geographic, Smithsonian Magazine, Forbes, CNBC, US News, and Business Insider. Find his full bio here.