Quoted By:
https://www.businessinsider.com/trump-executive-order-payroll-tax-cut-social-security-medicare-weakened-2020-8
>Economists are warning that if Trump enacts a payroll tax cut, it would weaken the shaky finances of the Social Security and Medicare trust funds.
>It's unclear whether the president would attempt to replace the funding as Congress did when it deferred employers' Social Security tax payments earlier this year.
>"It's like borrowing money from the Social Security and Medicare trust funds to give to employers just to hold," said Seth Hanlon, a tax expert.
A group of economists at a think tank are warning that if President Donald Trump moves forward with a payroll tax cut through an executive order, the step would weaken the funding mechanisms for Social Security and Medicare.
Over the past week, the president has threatened to circumvent Congress and sign an executive order to enact a payroll tax cut. The tax refers to the 15.3% levy on wages imposed by the federal government, and evenly divided between employers and workers. Most of it funds Social Security, but it also helps finance Medicare.
But experts say the step would further erode the shaky finances of both safety-net programs by yanking a critical source of funding.
"Trump's scheme would weaken the Social Security and Medicare trust funds by diverting the revenue from the employee portion of Social Security and Medicare taxes, and potentially the employer's share of Medicare taxes, from the programs' trust funds," the memo from the Center for American Progress said.
Earlier this year, Congress deferred the employer-portion of the Social Security tax (6.2%) through 2022 under the CARES Act. But they replaced the lost money with an infusion of general Treasury funds.
Trump, the memo said, lacks the authority to appropriate funds, which is Congress's purview.
>Economists are warning that if Trump enacts a payroll tax cut, it would weaken the shaky finances of the Social Security and Medicare trust funds.
>It's unclear whether the president would attempt to replace the funding as Congress did when it deferred employers' Social Security tax payments earlier this year.
>"It's like borrowing money from the Social Security and Medicare trust funds to give to employers just to hold," said Seth Hanlon, a tax expert.
A group of economists at a think tank are warning that if President Donald Trump moves forward with a payroll tax cut through an executive order, the step would weaken the funding mechanisms for Social Security and Medicare.
Over the past week, the president has threatened to circumvent Congress and sign an executive order to enact a payroll tax cut. The tax refers to the 15.3% levy on wages imposed by the federal government, and evenly divided between employers and workers. Most of it funds Social Security, but it also helps finance Medicare.
But experts say the step would further erode the shaky finances of both safety-net programs by yanking a critical source of funding.
"Trump's scheme would weaken the Social Security and Medicare trust funds by diverting the revenue from the employee portion of Social Security and Medicare taxes, and potentially the employer's share of Medicare taxes, from the programs' trust funds," the memo from the Center for American Progress said.
Earlier this year, Congress deferred the employer-portion of the Social Security tax (6.2%) through 2022 under the CARES Act. But they replaced the lost money with an infusion of general Treasury funds.
Trump, the memo said, lacks the authority to appropriate funds, which is Congress's purview.
