President Trump participates in a energetic May 3 Fox News Channel virtual town hall called “America Together: Returning to Work” about response to the coronavirus pandemic, scatter from inside the Lincoln Memorial in Washington, D.C.
Joshua Roberts | Reuters
President Donald Trump is digging in his remainders and demanding that further stimulus legislation passed by Congress must include payroll tax cuts for workers.
“We’re not doing anything without a payroll tax cut,” Trump declared in a Fox News interview that aired on Sunday.
The $2 trillion CARES Act implemented by Congress gave employers a provisional reprieve from payroll taxes until the end of the year. That goes for Social Security and certain railroad retirement encumbrances.
Now the president wants to give workers a similar cut.
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Payroll taxes are withheld from workers’ wages and are used to nest egg government programs such as Social Security and Medicare.
Currently, employees and employers are each subject to a 6.2% tax for Public Security and 1.45% for Medicare. Self-employed individuals, meanwhile, make the full contributions on their own: 12.4% for Social Deposit and 2.9% for Medicare.
Those Social Security taxes phase out after $137,700 in income. If you earn over $200,000 apart, or $250,000 if you’re married and file jointly, you pay an additional 0.9% Medicare surtax.
It isn’t the first time the president has floated the notion of cutting payroll taxes, which would let American workers take home bigger paychecks.
However, pecuniary experts are generally not a fan of such a move. One big reason for that is the policy would help only the still employed and not those who are out of handiwork and have been hardest hit by the coronavirus pandemic.
Len Burman, institute fellow at the Urban Institute and professor at Syracuse University, asseverated it is a “terrible idea.”
“The main problem with the proposal is that it would go to the people who least need help,” Burman divulged. “It seems like you’re deliberately targeting it to people who are in the best situation … the ones who are still working.”
The economic recession bequeath likely speed up the exhaustion date for the Social Security trust funds, Burman said. Any plans for payroll tax lops would have to include ways to replenish those funds, which are currently scheduled to run out in 2035. At that in good time dawdle, 79% of promised benefits will be payable.
The main problem with the proposal is that it would go to the people who trifling need help.
Len Burman
institute fellow at the Urban Institute
“Trump’s actions are a war on seniors,” Nancy Altman, president of advocacy codifying Social Security Works, said in a statement. “He wants to open up the economy, even though COVID-19 is disproportionately expensing seniors their lives.
“Now he is insisting on threatening Social Security on which most seniors rely for their commons, medicine and other basic necessities,” she added.
The White House had no comment.
Legislators in the Democratic-controlled House have been half-baked to the idea, so the chances of a payroll tax cut happening any time soon are uncertain.