Trump DOES NOT have the power to unilaterally rewrite the payroll tax law. Under the Constitution, the power belongs to Congress.
However, if Trump manages to pass the “Payroll Tax Cut Deferral Program”, the Social Security portion of payroll taxes (6.2%) won’t be taken out of paychecks. The employee portion of the payroll tax would allegedly be deferred through the end of the year, but that doesn’t mean Trump will reinstate the employer’s portion; and of course, it doesn’t aid unemployed workers.
The “Payroll Tax Cut Deferral Program”, (not Suspension Program), is nothing more than an interest-free loan; EMPLOYEES WOULD HAVE TO REPAY the federal government, likely on April 15, 2021. The risk here is, many workers won’t be able to adjust their spending to cover the obligation, thus, accruing penalties, and interest if not paid by the April 15th deadline.
There will be some employers who will continue to withhold the tax from their workers, placing the amount equal to the deferral in escrow , claiming a refund to be passed back to employees after Dec. 31, 2020, in essence providing employers with higher compounded interest rates. Meanwhile, workers won’t see but a few pennies more on their paychecks.
Additionally, if Trump’s reelected, he stated, he’ll “terminate” the payroll tax altogether depleting the $2.9 trillion in assets within four years. This whole “program” poses a mortal threat to the 64 million Americans currently receiving Social Security benefits and the hundreds of millions more who should receive benefits in coming decades.
Social Security status-quo defenders have assured us for the past 25 years that “Social Security is fully funded until 2036.” But lest we forget, Lyndon Johnson was the first president who *borrowed* $2 trillion from the Social Security Trust Fund to pay for the Vietnam War. Next, Ronald Reagan with the help of Alan Greenspan pulled off one of the greatest frauds ever perpetrated against the American people with their 1983 Social Security Amendment payroll tax hike which generated a total of $2.7 trillion in surplus Social Security revenue, then Reagan raided Social Security of roughly $3 trillion causing even more deficit. Reagan spent every dime of the surplus Social Security revenue on general government operations and military buildup. His successor, George H.W. Bush used the surplus money as a giant slush fund ‘borrowing’ $1.37 trillion of Social Security surplus revenue to pay tax cuts for the rich and his war in Iraq, at an estimated cost of $1.7 trillion, again, never repaid. Bill Clinton looted $3 trillion and spent all of the Social Security surplus revenue that flowed in during his presidency.
So when Trump say’s “we need to cut Social Security”, what he really means “Past presidents have *borrowed* many trillions from Social Security to pay for wars, corporate subsidies, special interest groups and tax cuts for the rich, therefore we need to cut back your benefits so we don’t have to pay any of it back…
Make no mistake about it, Trump’s intention is to bankrupt Social Security.
AS A SIDE NOTE:
Social Security currently has reserves of $2.9 trillion, while payroll taxes bring in $1 trillion per year. “Illegals” and “Undocumented Workers” bring in $12 BILLION a year in taxes. Whenever employers send in W-2 forms which have Social Security numbers not matching with anyone on record, the agency routes the paperwork to what’s called the Earnings Suspense File, where it sits until people can prove the wages are theirs. There are still 340 million plus unclaimed tax forms recorded in the file, compared to 270 million nearly a decade ago. A good portion of those forms were filed by employers on behalf of some of the most unlikely funders of Social Security “undocumented immigrants”. In fact, illegal immigration is considered largely responsible for the mushrooming of the file, with undocumented workers paying billions in taxes for retirement benefits they will never receive. Can’t argue undocumented immigrants drain the system!
BTW: It’s hard enough getting those benefits if you are a life-long citizen, so immigrants without social security numbers aren’t privy to the welfare some seem to think they get. Illegal immigrants cannot walk into social services and get money, food stamps, and rarely get medical unless it’s an emergency for a child born in the U.S. Immigrants don’t qualify! No paperwork no handouts. I have helped at food banks.., no illegals in line, they live mainly on rice, beans, eggs, tortillas, day in day out, meat is a treat, they’re afraid so they only seek work and if they pay into the tax system they never get a refund, our government keeps their money. They may use S.S. numbers of others or dead people but they can’t collect benefits… Let’s see you try running from the cartel, changing your name, can’t claim your place of birth, lose family, leave everything you know and love behind to give your children a chance at education and life while working jobs no one else will, while living with 3 to 5 families crammed into one squalid shanty.
Blacks and Asians have had their fill of field work, and face it, White people are just too damn lazy to squat down in the blazing sun 12 hours a day 7 days a week picking produce for less than minimum wage. Better thank immigrant field workers the next time you’re at the grocery store thumping watermelons and squeezing tomatoes!
Ironically its people like Trump, his family, and politicians who are the freeloaders, living tax-free as corporate welfare queens. They’re the ones receiving the “entitlements” along with all the multimillionaires in Trump’s cabinet, free Cadillac healthcare for life along with gigantic tax loopholes.
Human Rights Advocate, Researcher/Chronological Archivist and member in good standing with the Constitution First Amendment Press Association (CFAPA.org)
Kristeen Irigoyen-Hernandez aka Lady2Soothe Follow @OurVoicesEcho