Executive Order Deferring Payroll Tax Cut Just Adds To The Mess
President Donald Trump, citing inaction by Congress, decided to use his favorite tool as president, the executive order, to provide his own idea of economic relief due to the COVID-19 pandemic, but just minutes after Trump signed the executive orders many experts indicated these measure would do little to provide economic relieve and many questioned whether he even has authority to enforce these executive orders.
One of the executive orders was to defer the payroll tax. The order calls for payroll taxes, this includes Social Security and Medicare taxes, to be deferred from September of 2020 until the end of the year. This order does not eliminate these taxes it just means that employers will have to pay them beginning in January 2021 combined with ongoing Social Security and Medicare taxes. Trump’s executive order just delays these taxes they are not eliminated. If employers decide to delay these taxes taxpayers will just have a lot more money withheld from their paychecks beginning in January.
The Washington Post recently released an article questioning whether the payroll tax cut executive order will really end up doing anything because employers will be hesitant to delay in collecting these taxes just to have their employees pay it all back in 2021 providing really no relief at all the workers.
“I think what most employers are going to do is not pass this on to their employees,” Josh Bivens was quoted in The Washington Post article. Bivens is the director of research at the Economic Policy Institute. “They are not going to give money to the worker because government is at some point going to come back for it.”
The other major problem with this executive order is that it holds back funding for Social Security and Medicare, two programs that can’t afford any more decreased funding.
