The Corner

Politics & Policy

The Complications of That Payroll-Tax Cut

Jim Tankersley explains how it could end up being a lot smaller than advertised:

The uncertainty raises a host of questions for companies and workers, including a cascade of intricate tax questions, according to a recent analysis published by Joe Bishop-Henchman of the National Taxpayers Union Foundation. (For example: If workers owe less payroll tax, they would owe slightly more income tax; would employers change, on the fly and in the middle of the year, how much income tax they withhold?) He concluded that most companies were unlikely to take any risks.

“Without detailed answers to some of these questions,” Mr. Bishop-Henchman wrote, “employers might just steer clear of all of it by continuing to do what they’ve always done, blunting the desired economic impact of reducing taxes.”

Ramesh Ponnuru is a senior editor for National Review, a columnist for Bloomberg Opinion, a visiting fellow at the American Enterprise Institute, and a senior fellow at the National Review Institute.

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