Tax Cut May Not End Up as Economic Cure in Coronavirus Fallout

House Ways and Means and Senate Finance Committee tax staffers said a congressional response to the coronavirus likely won’t revolve around taxes.

President Donald Trump tweeted earlier this week that a short-term payroll tax cut should be considered, fueling a conversation around the potential for a temporary stimulus package. But a stimulus package to boost the economy—if needed—would likely include direct government spending rather than only tax cuts, the staffers said Friday at a tax conference in Washington.

• “I’m not exactly sure what policy goal that is trying to solve,” said Andrew Grossman, the Democratic chief tax counsel for Ways and Means.
• Grossman added that people who lose their jobs due to the virus’s economic impact, or because they’re sick, wouldn’t see the benefit of a payroll tax cut.
• “We don’t know enough yet about where this is going,” said Mark Warren, the Republican chief tax counsel for Senate Finance. “Is the tax code the place to even do that?”