WASHINGTON (Reuters) – Senior White House officials are discussing the possibility of a temporary payroll tax cut in an effort to boost the economy in the face of a potential slowdown, the Washington Post reported on Monday, citing three people familiar with the discussions.
The talks are in the early stages, the Post reported, adding that officials had not decided whether to push Congress formally to approve a cut.
The White House did not immediately respond to a request for comment from Reuters.
Millions of U.S. citizens pay a payroll tax of 6.2% on their earnings to finance the Medicare health insurance program for the elderly and Social Security, which provides income payments for retirees, the Post said.
The Post did not say how large a tax cut officials were discussing. The last payroll tax cut was during the Obama administration, when payroll taxes were reduced to 4.2% to encourage consumer spending during an economic downturn. The tax was reset to 6.2% in 2013, the Post said.
Discussion of the payroll tax cut comes at a time of concern about a possible economic slowdown as the United States and China engage in a trade war. The U.S. Treasury bond yield curve inverted last week for the first time since 2007 in a sign the economy could be headed toward a recession.
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