President Donald Trump's suggestion to cut payroll taxes may prove ineffective until policymakers can more fully consider the economic fallout associated with the virus, Ways and Means Democratic chief tax counsel Andrew Grossman said at a conference hosted by the Federal Bar Association in Washington, D.C.
"I think we really need to take a step back, look at what's going on before we make any decision about whether a tax package is really appropriate here and makes a lot of sense in the context of coronavirus," Grossman said.
Trump said on Twitter earlier this week that Democrats should propose a one-year payroll tax cut.
But carrying out a payroll tax cut in an effort to boost the economy may be too narrow of an approach, Grossman said. Policymakers still lack actionable information about which industries are being affected by the health scare, he said.
If the Trump administration was interested in promoting sustained economic growth, it should focus on infrastructure projects, Grossman said.
"Maybe that's not the short-term injection of helicopter cash that some people seem to be thinking about here, but we do really believe for the long term, that's the best way to stimulate growth in the economy," he said.
Mark Warren, the chief counsel for the Senate Finance Committee, likewise said that Congress should not be making hasty tax policy decisions.
"Clearly, there are precautions that are being taken at this point, and I think rightfully so, but trying to anticipate a problem, we need to know what the scope is, we need to know more what the impact is going to be, how widespread in the economy or more narrow," he said, comparing the government's response to the health scare, in part, to how it reacts to natural disaster recovery efforts.
Senate Finance Committee Chairman Chuck Grassley, R-Iowa, told Law360 in a separate interview that he may be open to considering cutting taxes down the road in response to the new coronavirus.
--Additional reporting by Dylan Moroses and Alan Ota. Editing by Neil Cohen.
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