I owned an accounting , tax & payroll business for thirty years, so I have some expertise in the issues President Trump addressed in his executive actions last night. What Trump calls “payroll taxes” is really the money withheld from an employee’s paycheck that goes to fund Social Security & Medicare.
Almost all of us have been paying into this fund our entire working lives. It exists to insure that we will have money and medical care when we are too old or disabled to work. When this “tax” gets cut it means there is less money for each of us when we need it.
The payroll tax “holiday” the president is pushing only affects people who are working. It does nothing to help the millions who are unemployed. The $400 per week in additional federal unemployment benefits is dependent on already struggling states being able to fund 25% of the payments. It is also less than the $600 that unemployed people were getting until last month, and less than the Democrats wanted.
Since the additional benefits aren’t coming from Federal Unemployment Funds it will require states to set up additional systems to test for eligibility and distribute the funds. This could slow down payments.
The “deferred payroll taxes” action is also a blatant political ploy. Trump says that if he is re-elected he will forgive the deferred payments. The implication is that if he’s not re-elected, the deferred payroll taxes will be due at the end of the year. Doesn’t that sound like he’s trying to buy our votes?
There is some question about whether the president’s actions are legal. What is obvious is that President Trump’s executive actions, no matter whether they are constitutional or not, will do more harm than good.
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