Amid stalled congressional negotiations over another coronavirus relief bill, President Donald Trump issued several executive orders Saturday to extend economic assistance to Americans still struggling from the impact of the pandemic, with a temporary suspension of the payroll tax among them.
On Wednesday, President Trump announced his intention to terminate the payroll tax on a permanent basis, should he be elected to a second term, the New York Post reported.
“We’ll be terminating the payroll tax”
It has been estimated that the payroll tax, which is paid by both employees and employers, brings in about $100 billion in revenue each month that is ostensibly earmarked to fund payouts for Social Security and Medicare, and the Post noted that it would take cooperation from Congress for Trump to permanently eliminate it.
While the payroll tax does, in theory, provide funding for Social Security, in actuality there is no separate “lockbox” for it, and the fungibility of money means the tax receipts and payouts for the program simply go through the Treasury’s general fund like most everything else.
During his daily press briefing on Wednesday evening, President Trump said of the executive order, “I’m providing a payroll tax holiday to all Americans earning less than $100,000 per year, meaning bigger paychecks for working families through the end of 2020. That’s a tremendous amount of money that’s being supplied and given to families.”
He then addressed two of the primary critiques against his payroll tax holiday, namely that his order was only a temporary suspension and the deferred taxes would have to be repaid next year, as well as assertions that his action would defund and endanger the Social Security system.
“When we win the election — when I win the election, I’m going to completely and totally forgive all deferred payroll taxes without in any way, shape, or form hurting Social Security,” Trump said. “That money is going to come from the General Fund. We’re not going to touch Social Security. I said from day one that we’re going to protect Social Security, and we’re going to protect our people.”
He can’t do it alone
A moment later, the president revealed, “And the payroll tax — we’ll be terminating the payroll tax after I, hopefully, get elected. We’ll be terminating the payroll tax, so that will mean anywhere from $5,000 to even more per family, and also great for businesses and great for jobs.”
Trump noted that the suspension of the payroll tax was better than the $1,200 direct payments Congress had approved earlier and said, “It’s going right directly to the people, and it goes there very easily. But it also creates stronger companies to employ the people.”
“So we will be — on the assumption I win, we are going to be terminating the payroll tax after the beginning of the new year,” he added.
The elimination of the payroll tax would be nothing short of an immense economic windfall for both American workers and the businesses large and small that employ them, as it would allow workers to keep potentially several hundred dollars more per month of their hard-earned money, amounting to several thousands of additional dollars per year.
As was noted by the Post, it will indeed take an act of Congress to permanently eliminate the payroll tax, which means it is all the more incumbent upon the American people, assuming they want to keep more of their own money, to not only vote for President Trump’s re-election but also to ensure that Republicans regain control of the House and retain their majority in the Senate.