The Obama administration is considering a new tax cut to replace the payroll cut which is due to expire at the end of this year.
The plan would put hundreds of dollars into the pockets of workers, reports The Washington Post
Obama administration officials have concluded that the economy, while improved, is still fragile enough that it may need another bout of stimulus,” the Post reports, but precise details of the proposed cut are sketchy.
Although many Democrats have championed the idea of extending the payroll tax cuts, it has caused a rift in the party. Others are cool to the idea as it siphons money from the Social Security fund. The new tax plan is believed to avoid that pitfall.
The Post points out that any new tax cut plan would come just as Democrats and Republicans have to deal with wasy of avoiding the “fiscal cliff” caused by the expiration of the Bush-era tax cuts and plans to cut $1.1 trillion from the national budget which was agreed upon when agreement on cutting the budget deficit could not be reached.
Economists predict that if both measures are brought in at the start of next year it send the country heading towards another recession.
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