Well, there you go – this is why I keep bringing up the vague-as-hell payroll tax 'holiday'… They will need to get the 'forgiveness' piece in place before implementing, or it simply won't fly. Purpose is to stimulate, but this makes it a loan, and is nothing we can't do already by claiming Married and 99 dependents for our deductions if we want.
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Only 7 States Have Signed Up For $300 Unemployment Stimulus As Businesses Warn They Won't Participate In Payroll Tax Plan
by Tyler Durden
Tue, 08/18/2020 - 20:25
With Congress still deadlocked over Phase 4 of the fiscal stimulus - despite a report that Nancy Pelosi was getting closer to the Republican bid of $1 trillion as she was willing to cut the Democrat ask "in half" to reach a deal - according to an update from FEMA, only 7 states, Colorado, Missouri, Utah, Arizona, Iowa, Louisiana and New Mexico, have signed up with FEMA so far to access the additional $300 weekly stimulus for those receiving unemployment benefits under Trump’s Aug 8 Executive Order. Using initial claims data, this accounts for only 6% of Americans receiving unemployment insurance, which means that more than 90% are currently ineligible for the emergency stimulus.
And while more states are expected to continue to sign up, the process will be lagged which will result in delayed payments.
What is interesting, as Citi economists have speculated, is whether states that did not apply to FEMA will end up seeing their unemployment rates fall faster, in other words, will it turn out to be the case that unemployment rate is higher than it would be without the stimulus because some individuals are making more not working?
That said, it is concerning that the single biggest boost to the US consumer which buoyed the economy for much of the past three months - federal stimulus for the unemployed…
… is being delayed both through FEMA but also through Congress not moving on Phase 4.
Meanwhile, in another major setback for Trump's attempt to single-handedly carry the economy through to the Nov 3 finish line without Congress, a coalition of big-name business groups warned that many employers won’t participate in President Trump’s payroll tax deferral plan.
Calling it “unworkable,” they said in a letter Tuesday to Treasury Secretary Steven Mnuchin that it risks saddling their workers with large postponed tax bills they could have trouble paying back. According to the coalition, someone earning $35,000 would see their biweekly pay go up by $83 this year, the groups wrote, but would owe $751 next year. People earning $75,000 would see a $178-per-paycheck bump now, but would face a $1,609 tax bill next year.
More:
https://www.zerohedge.com/political/only-7-states-have-signed-300-unemployment-stimulus-businesses-warn-they-wont-participate