Payroll tax holiday begins today. What it means. (salary, costs, benefits)

[BugsyPal]

Originally Posted by prospectheightsresident

What is means is not clear. On it's face, it is a tax deferral. But there are a number of ways to make it tax forgiveness, including one that President Trump can do on his own. Specifically, in terms of action that President Trump can take on his own, he can issue blanket pardons to anyone who has taken advantage of this deferral once the period ends (but it would only be backward not forward looking, which shouldn't be a problem), which would effectively make it tax forgiveness as people couldn't be prosecuted for failure to repay. But I don't think it'll even get to that point as I see no politician (not even Democrats) who are going to willingly let the middle class have a huge tax bill; it would be political suicide. Thus, I expect a legislative remedy at the very least.

As to @selhars' point, yes the president has the power to implement this as it fits squarely within enforcement discretion, which every president and elected executive official has generally.

You're wrong on a few fronts.

First of all neither republicans nor democrats in Congress wanted another payroll tax holiday. Mitch McConnell told DT this and refused to bring it to senate floor and or even include it in any version of second stimulus bill GOP was cooking up.

Two, while POTUS can "pardon" a criminal act there would be potentially thousands of businesses and hundreds of thousands individual employees who would need some sort of action to get around IRS enforcement action for back taxes.

Three, individuals in middle class won't have a "huge" tax bill since this action only covers a few months (1 September to end of December). Smart persons would simply put money aside to pay back these sums because they know it is coming.

Four, Congress likely will be in no freaking mood next year to keep having their authority usurped by the Orange Maniac (assuming DT wins in November). Congress in particular the House controls nation's purse strings by USC. Surely by now the Pelosi woman (or whoever is Speaker after of House in new year) has learned not to trust DT an inch. There are four thousand ways from Sunday House can mess with DT or any POTUS. If they would pull up their big boy/girl pants and do so, that would be that.

Finally there are very good reasons why neither GOP nor democrats wanted another payroll holiday; it does jack sh**t for middle class or below workers, but sends bulk of benefits to those with highest earned income. In otherwise DT did what he has done from get go; given his pals and other wealthy people a nice fat bit of cash at taxpayers expense. These people can more than afford to pay back this no interest loaned money.

https://www.forbes.com/sites/shaharz...cial-security/

[BugsyPal]

Originally Posted by selhars

Where are congressional Democrats on this?

I thought Trump didn’t have the power, even with an executive order, to implement this. Did anyone challenge this in court? And what does this mean for the Social Security fund?

Nothing, not a GD thing.

DT nor any POTUS can stop taxes from being owed. All DT did was tell the Treasury to defer collecting last four months of payroll taxes. But those sums are still due by 15 April in *FULL*. So SS funds will still get their money; just a bit later.

Only Congress can eliminate a tax temporarily or permanently, something neither party has shown interest in doing.

[rrah]

What it means is that a lot of lower income people will defer the payment and owe a lot of money they don't have next year.

It's kind of like a pay day loan-the people that can least afford it, will get burned.

[Johnhw2]

If someone works only until year end 2020 then quits the employer owes the money to be paid back if no employee is there to collect it to be paid back from. This is a do nothing hassle and most employers will opt out of offering it.

[Serious Conversation]

Originally Posted by Johnhw2

If someone works only until year end 2020 then quits the employer owes the money to be paid back if no employee is there to collect it to be paid back from. This is a do nothing hassle and most employers will opt out of offering it.

The amount of overhead and quick turnaround time makes it a nonstarter for most large employers.

[UntilTheNDofTimE]

Originally Posted by Serious Conversation

The amount of overhead and quick turnaround time makes it a nonstarter for most large employers.

I agree, but how would this work in this scenario?

Scenario:
The payroll tax holiday becomes permanent for this 3 month period this year only.

How would the employer that opted out repay employees? Seems like a nightmare to look at what each employee had paid into SS through 08/31 and reimburse overages.

As an employee, you cant really get reimbursed through tax filing either since wages earned for most arent static. You cant just reimburse 25% of SS wages paid.

Seems like a total mess for an employer to participate or not participate. Imagine the media backlash if a company like Walmart opted out and then it became permanent and employees were not paid their extra wages they should have received for 6+ months while the government needs to reimburse them. At the same time if they chose to participate and the holiday was not permanent, they would look evil as well.

[lchoro]

Originally Posted by TexasLawyer2000

The executive order is a temporary holiday with the obligation to pay the difference. It does not impact social security.

A promise doesn't mean anything.

A promise to renege on a promise. Only Trump and Trump supporters can see that there's no ethical problem with that as well as an impact on cash flows to the government.

The trust fund still currently takes in more than it needs to pay out benefits. While the tax receipts no longer is sufficient to pay benefits, the interest on the trust fund is still charged against the general revenue fund. There is still an operating surplus with the two cash flows. With the payroll tax holiday, there is not enough coming in to cover benefits. As a result, there is a drawdown on the general revenue fund. Trump's move is not only stealing from Social Security revenues but from future interest it would have received on the trust fund.

[TexasLawyer2000]

Originally Posted by lchoro

A promise to renege on a promise. Only Trump and Trump supporters can see that there's no ethical problem with that as well as an impact on cash flows to the government.

The trust fund still currently takes in more than it needs to pay out benefits. While the tax receipts no longer is sufficient to pay benefits, the interest on the trust fund is still charged against the general revenue fund. There is still an operating surplus with the two cash flows. With the payroll tax holiday, there is not enough coming in to cover benefits. As a result, there is a drawdown on the general revenue fund. Trump's move is not only stealing from Social Security revenues but from future interest it would have received on the trust fund.

The payroll tax holiday that the OP is discussing and is a result of an executive order is a temporary holiday from paying payroll taxes. The taxes will have to be paid back next year. Since any missed revenue will be replenished shortly, it will not impact SS.

The problems you are discussing are unrelated to the executive order.

[DKM]

Originally Posted by TexasLawyer2000

The payroll tax holiday that the OP is discussing and is a result of an executive order is a temporary holiday from paying payroll taxes. The taxes will have to be paid back next year. Since any missed revenue will be replenished shortly, it will not impact SS.

The problems you are discussing are unrelated to the executive order.

No, he is correct. Deferring the tax means the trust fund will have to pay the interest on the deferral. How can that not impact SS unless the general fund is going to pay for the lost interest?

[k374]

The balance is going to be forgiven/written off... no way thousands are going to be able to pay some baloon payment. These folks will start crying to the government, the media will make a big hue and cry about it and the payments will be forgiven.