Stimulus payment update: The alternative option to a second round of checks?

Opinions, reviews, analyses & recommendations are the author’s alone, and have not been reviewed, endorsed or approved by any of these entities. UponArriving has partnered with CardRatings for our coverage of credit card products. UponArriving and CardRatings may receive a commission from card issuers. 

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. 

H/T

UponArriving has partnered with CardRatings for our coverage of credit card products. UponArriving and CardRatings may receive a commission from card issuers. Responses are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser’s responsibility to ensure all posts and/or questions are answered.

13 comments

  1. This is a stupid idea. So when the younger people want to retire they won’t have the social security to live on. The people who are out of work need money to pay bills. This is why people are rioting, and won’t stay home. Opening businesses to early is just making this virus worse. People need to stay home so this virus will stop spreading and people can go back to work. This is ridiculous

  2. This is not going to help! What about all of us people that are senior citizens and we barely get any money and can’t even meet our needs we don’t work so how is that going to help us and other people who don’t work. Lots and lots of people are going to lose their homes and be homeless.

  3. I couldn’t agree more, the Republicans have been trying to rob people off SSI for years. If they can give rich people trillions of dollars in tax cuts and spend trillions on military tanks that are not needed they can most definitely support the people of the United States for a short time. Pay the people save lives and stop this virus.

  4. What’s that going to do for the people that don’t have jobs right now because of this virus? I got kids to take care of and Bill’s that I can’t even pay and can’t even get a damn job because people’s hours are already getting cut the way it is so who’s going to want to hire someone right now? If the government really wants to keep everything contained and keep the citizens happy they need to issue another check or card with funds on it so people without jobs don’t have to go from store to store risking getting infected looking for work.

  5. Please help I have not even received my first check and I’m disable trying to get a disability.
    Sandra Powell
    423 Nelson Drive
    Jacksonville NC
    28540

    And I qualified for a stimulus check cause I worked in 2018 and some in 2019 but became unable to work because of back and legs going out on me. I sure could use some help please.

  6. I didnt get a stimulous check becaise i was claimed as a dependent..what does that have to do with now ?? I still have bills and responsibilities to tend to , i cant work because im disabled …but i got qualified for ssi since my fight took 8 years i ran out of points for the system to be qualified for disability …not my fault 😭 …..
    Signed
    Completely lost & SC***ED

  7. This is the dumbest, yet expected, idea yet. We all should know by now that anything involving cutting taxes for businesses ONLY benefits the businesses. This country JUST shed over 20 million jobs, so guess what? Those are people WON’T be getting a payroll tax reduction but those businesses will. So the government will save money and pretend to help Americans. AND this program effectively defunds the “social” programs that Republicans have been trying to get rid of for years. Pay the $2K per month to all Americans for 6 months. That’ll definitely stimulate the economy. But this proposed approach will kill two birds with one stone except the one thing they hope. This approach will certainly put us directly into another Great Recession, if not depression. This country “found” trillions of dollars to pour into the stock market, but can’t quite seem to find more money to put into the hands of Americans. I hope people wake up to the fact that This. Country. Does. Not. Care. About. Citizens. unless you’re rich, then, yes.

  8. I willie was claim on tax return and didn’t get a stimulus check,so what that have to do with my living arrangement, I needed a check to, I think this was unfair because i wasn’t given any part of that person money, just because they claim me on there tax return.This is really unfair who ever made this decision.

Leave a Reply

Your email address will not be published. Required fields are marked *