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Paying employers to hire their workers back: unique idea or just more debt? - The Motley Fool & AMAC
Sen. Josh Hawley (R-MO) is proposing a sort of negative payroll tax designed to keep as many employed as possible versus merely paying money out to people directly. Dan Caplinger of The Motley Fool explains Sen. Hawley’s plan in this informative article. Companies are laying off employees because of a lack of incoming revenue to pay them due to the closures caused by the pandemic. Government programs to encourage employee retention like the Payroll Protection Program have been too complicated and unwieldy for many businesses. The Hawley plan would cut out the “middle men” (banks) and instead get money directly to employers on the condition that they use it to rehire their employees. The plan would use a refundable payroll tax rebate to cover 80% of a worker’s pay up to the median U.S. wage level. Instead of employers paying payroll taxes to the government, the government would instead reverse the money flow and put money into employers’ bank accounts.
Hawley’s GOP colleagues have been cool to his idea, though former economic advisor for the Reagan administration and a member of the White House Economic Recovery Task Force, Arthur Laffer, has signaled support. Read more details on Caplinger’s summation of Hawley’s negative payroll tax here.
The Association of Mature American Citizens (AMAC) has been leery of proposals that would hurt the solvency of Social Security over the long term, even for short term economic or political gains. AMAC believes Social Security must be preserved and modernized by making modest changes in cost of living adjustments and the retirement age, with no additional taxes on workers. AMAC supports a bipartisan compromise, “The Social Security Guarantee Act,” taking portions of bills introduced by former Rep. Johnson (R-TX) and current Rep. Larson (D-CT) and merging them with the Association’s own research. One component is Social Security PLUS, a new, voluntary plan that would allow all earners to have more income available at retirement. This component is intended to appeal especially to younger workers. AMAC is resolute in its mission that Social Security be preserved and modernized and has gotten the attention of lawmakers in DC, meeting with many congressional offices and staff over the past several years. Read AMAC’s plan here.