SOUTHERN BROOKLYN — In light of the coronavirus pandemic, President Trump has called for a payroll tax cut through the end of the year that could benefit small businesses throughout the borough, especially in light of Mayor de Blasio’s executive order demanding that all restaurants and bars be closed to customers except for food take-out and delivery.
It would serve as a means to add extra cash into people’s pockets as the economy crashes. Additionally, it would allow restaurants and mom and pop shops that are struggling to survive before being forced to close their doors.
Payroll tax cut could make a big difference
For George Paterakis, general manager of Bay Ridge’s popular Bridgeview Diner, the payroll tax cut could make all the difference in the world.
“It’s been very bad for the last two days. We usually have a line out the door for dinner but yesterday we served maybe 50 people,” Paterakis told this paper on Friday, March 13. “We might have made $500 but we’re supposed to make $1,500 to $2,000. You’re taking about a big, big loss.”
Paterakis went to say that whereas customers would normally leave $200 in tips at dinner, it’s been more like $30 over the past few days since the coronavirus panic has set in.
“Having to separate people when seating is also a cause for concern. And talk about my cooks, I have five but now I have to cut it down to two. And I normally have two cooks at night, but now I can only afford to keep one after midnight,” explained Paterakis.
He also lamented that he’s had to cut his wait staff down from six or seven to three. “We don’t know how long this will be and I really don’t how we can survive like this,” he added.
Since we interviewed Paterakis, de Blasio has issued an executive order limiting all bars and restaurants to food delivery and take-out, adding further immediacy to the need for cash flow in south Brooklyn.
With Asian restaurants having already been forced to close due to the lack of business in Sunset Park and Bensonhurst, and small shops fighting to get by with less foot traffic, Trump views the tax cut as a way to help individuals and small businesses by keeping money flowing.
“If you want to get money into the hands of people quickly and efficiently, let them have the full money that they earned, APPROVE A PAYROLL TAX CUT until the end of the year, December 31,” Trump tweeted Friday morning.
“Then you are doing something that is really meaningful. Only that will make a big difference!”
When Trump proposed the payroll tax cut last Tuesday at a luncheon with both Republican senators and Democrats in the House, there was opposition to the plan from both sides of the aisle. The administration renewed calls for the payroll tax cut on Friday, March 13.
What the payroll tax does
Payroll taxes are taken out of workers’ paychecks to fund Social Security and Medicare. Congress last passed a payroll tax cut in 2011 and 2012 during the Obama administration. The legislation is expected to provide for paid sick leave, free coronavirus testing, increased unemployment benefits and meals for students from underprivileged families.
U.S. Rep. Max Rose said that he is open to the payroll tax credit and called the coronavirus a threat to both our health and economy.
“There’s no question this pandemic is impacting our economy, and since we don’t yet know the full extent of the impact, we should leave all options on the table to counteract it,” Rose told this paper.
“But let me be clear, this virus is challenging us on two fronts: public health and the economy. And right now, addressing the public health threat and protecting the American people must be our first priority. That’s why I’m pressing to expand paid sick leave and small business loans, ensure frontline healthcare workers are protected, and leading the charge to expand testing capabilities,” Rose added.
Assemblymember Nicole Malliotakis saw the payroll tax cut as a positive step forward.
“The city, state and federal government are going to have to evaluate ways to provide economic relief to individuals and businesses that are experiencing interruption right now,” Malliotakis told this paper.
“The payroll tax will allow employees to keep more of their money in their pockets and I think it’s a good step. With people staying home, restaurants, hotels a lot of the bars are hurting with less economic activity. And with the payroll tax cut many of the employees will also be able to keep more money in their pocket and I think it’s going to benefit everyone,” she added.