How Does Tax Cuts Help People?

[Deleted]

I've been thinking about the current and likely near future economic situation here in the US.

The government talks about payroll tax holidays, very limited paid sick time, and small business LOANS through the SBA to help people during the pandemic.

How does any of those things actually help people pay their mortgage or put food on the table? Why would a small business with no customers in the near future take on a loan? Especially since I believe SBA loans are traditionally hard to get and personally backed?

Of course, we are all responsible for stocking up and having savings, but the reality is a large percentage of the US population can't or hasn't. What happens when they start running out of money for food or to pay their bills? I can't see the utility and mortgage companies not caring about their payments...

Personally, I find the economic impact scarier than the virus itself and I don't happen to think this will all blow over once magical warm weather blows in...

[bean29]

They should be offering Health Care and Disability Insurance Coverage.

As they say, Trump is only concerned on the effect of all this on the economy. Offering Payroll Tax Reductions will stimulate the economy in his mind - so that is what he decided to do. He doesn't care if people die, he feels he is not personally at risk so  to the general public.  It seems to me that that is not being received well by congress, so suspect it may not come to pass.

I would feel a lot better if I felt "Health Care Experts" were in charge.  it seems as though our response is centered around the political impact the Pandemic will have.

[giramomma]

They were talking about the tax cuts on public radio today. All of the guests agreed that sending checks out to folks like Bush did would be the better choice.

[NastyWoman]

IMO the "The government talks about payroll tax holidays" are nothing but yet another attempt to weaken SS and Medicare by reducing their funding source

[NomoreDramaQ1015]

It worked the last time and made him popular.   Why wouldn't it work in every scenario?

[haapai]

Mar 12, 2020 10:04:17 GMT -5 @shastasnewlife said:

Of course, we are all responsible for stocking up and having savings, but the reality is a large percentage of the US population can't or hasn't. What happens when they start running out of money for food or to pay their bills? I can't see the utility and mortgage companies not caring about their payments...

Personally, I find the economic impact scarier than the virus itself and I don't happen to think this will all blow over once magical warm weather blows in...

  I'm thinking like this too. 

I'm not particularly likely to take a hard financial hit from the disease, even if I get it and miss weeks or months of work, but I certainly know plenty of folks who will spiral into insolvency if they miss as little as two weeks of work or have to take a 20% cut to income for months.  There's so much financial fragility out there and this is a lousy time for families to start merging households, especially if that means putting three generations under one roof. 

On the other hand, utility companies can be surprisingly good at working with folks and mortgage companies may find that offering generous relief is very much in their best interests.  (They take a bath when they foreclose.) 

Food seems to be the sticky wicket.  The answer may be lots of SNAP and generous donations to food banks. 

It's almost easier to focus on the disease than to think about the financial fallout that you know is going to be very bad. 

[Tiny]

Mar 12, 2020 13:29:22 GMT -5 NastyWoman said:

IMO the "The government talks about payroll tax holidays" are nothing but yet another attempt to weaken SS and Medicare by reducing their funding source

Yes. This was my first thought.
My second thought was - you have to get a paycheck to benefit from the payroll tax cut (and the problem is gonna be people NOT getting paychecks)
and my third thought was exactly ow is 6% (the SS tax amount) really gonna help people pay their rent/mortgage and put food on the table?

[Deleted]

Mar 12, 2020 14:32:47 GMT -5 Tiny said:

Mar 12, 2020 13:29:22 GMT -5 NastyWoman said:

IMO the "The government talks about payroll tax holidays" are nothing but yet another attempt to weaken SS and Medicare by reducing their funding source

Yes. This was my first thought.
My second thought was - you have to get a paycheck to benefit from the payroll tax cut (and the problem is gonna be people NOT getting paychecks)
and my third thought was exactly ow is 6% (the SS tax amount) really gonna help people pay their rent/mortgage and put food on the table?

Exactly. There are millions of us who work as contractors, freelancers, or on the gig economy where we are disposable. If there's no work we don't get sick time, we get dismissed. And, in times like this, everyone starts hogging up work and it becomes harder to find.

Many also have micro businesses that aren't exactly SBA loan eligible or bad credit and can't touch an SBA loan.

While I'm going to be fine and could technically help my kids during the near future to keep them fine, there are a LOT of people out there who aren't so fortunate. 

One of the governors the other day was mentioning food being delivered to people quarantined in their homes. Would that be government cheese? Imagine how well that would go over.

I seriously fear some civil unrest in areas with high-density, low-income population when this gets worse. 

[oped]

Mar 12, 2020 13:15:59 GMT -5 giramomma said:

They were talking about the tax cuts on public radio today. All of the guests agreed that sending checks out to folks like Bush did would be the better choice.

But weren’t they just advance payments? Again what if you have no income at the end of the year? I’m not sure how it works...

[countrygirl2]

That's the only thing I worry about, the have nots. We are one of the houses on the shining hill and at this time, likely not a good position to be in.

Yep, I'm stocked, in every way, we will be fine. But not if others start to get hungry and we are not. We could not protect this place for long. So yep that is my concern only. Hope it does not come to that.

[CCL]

Mar 12, 2020 15:28:12 GMT -5 oped said:

Mar 12, 2020 13:15:59 GMT -5 giramomma said:

They were talking about the tax cuts on public radio today. All of the guests agreed that sending checks out to folks like Bush did would be the better choice.

But weren’t they just advance payments? Again what if you have no income at the end of the year? I’m not sure how it works...

I don't remember for sure if it was Bush, but I do remember several years ago (maybe 15 or so) they gave out free money. It was some sort of tax bonus. I think we got around $1200. None of it had to be applied to your tax bill.

ETA: Found this.

www.cnn.com/2008/POLITICS/02/13/bush.stimulus/

[TheOtherMe]

I remember getting $600 and I didn't have to pay it back with my tax form.

[giramomma]

Mar 12, 2020 15:28:12 GMT -5 oped said:

Mar 12, 2020 13:15:59 GMT -5 giramomma said:

They were talking about the tax cuts on public radio today. All of the guests agreed that sending checks out to folks like Bush did would be the better choice.

But weren’t they just advance payments? Again what if you have no income at the end of the year? I’m not sure how it works...

Nope. Not advanced payments.

Just money from the govt.

The guests thought it would be more useful for folks to have 600-almost 2K (a family with two parents and two kids)...than to have a few extra bucks a paycheck. People might be more inclined to stay at home knowing they had a little saftey net...vs just a couple of extra bucks.