He unsuccessfully pressed for one earlier in the year, and renewed comments this week make it clear the policy remains a key White House priority. But a growing number of Republicans aren’t in favor of the idea and most Democrats don’t support it.
Payroll tax cuts have had mixed results in the past, and some economists argue that it’s not the best way to boost the economy right now.
Here’s what you need to know:
A payroll tax cut would reduce the amount taken out of workers’ paychecks to fund federal programs including Social Security and Medicare.
Congress would have to decide how much to reduce the rate and how long the tax holiday would last.
Currently, workers pay about 7.65% of their wage and salary incomes. Employers match the amount while those who are self-employed pay both shares, though they get to deduct the employer portion.
A temporary payroll tax cut was implemented in 2011 in the aftermath of the financial crisis. It reduced the employee-side tax by 2 percentage points.