Trump's Payroll-Tax Deferral Creates Predicament for Congress

[Yo_Mama_Been_Loggin]

WASHINGTON—President Trump’s decision to defer payroll taxes until the end of the year is leaving challenges for lawmakers to manage after he leaves office in January, and they haven’t figured out what—if anything—to do.

Members of Congress in both parties weren’t keen on the August executive action, which let employers stop collecting the 6.2% Social Security payroll tax from many workers in the final four months of 2020. The move was meant as a form of relief during the economic slump caused by the coronavirus pandemic, but few employers stopped withholding.

That created a predicament for Congress. Employees whose payroll taxes temporarily shrank will face double withholding starting in January, which could pinch households that haven’t planned for it.

Doing nothing could cause harm for those workers, but helping only them could be unfair to others whose taxes continued to be withheld.

“No one will be happy no matter how that gets resolved,” said Mark Mazur, a former Obama administration official who now directs the Tax Policy Center. “It’s kind of like a no-win thing.”

https://www.msn.com/en-us/news/politics/trumps-payroll-tax-deferral-creates-predicament-for-congress/ar-BB1bqgwm?li=BBnb7Kz

[Takket]

1. "The move was meant as a form of relief"

The fuck it was...........

it was a publicity stunt to trick people into thinking they got a tax cut because their check was bigger. Thank goodness my employer saw through this bullshit and the disaster it would cause for those on a tight income that didn't realize they were being scammed.... and did NOT stop collecting the tax.

[MaryMagdaline]

2. As did we. We never bought in and continued to take full tax

Ribbing social security and then hitting poor people for double the tax in the new year. A trump created nightmare.

[barbtries]

4. thank you. nt

[Shermann]

7. Also I understand that if an employee leaves the company...

...the employer would be on the hook for the owed payroll taxes. Thus they opted out.

[Hoyt]

3. My bet is that Congress will have little choice but to enact legislation that forgives everyone

of payroll taxes during that period. If one paid it, they'll get it back.

[ProfessorGAC]

10. Probably So

But, I think this is a small number to rectify.
The USCofC, NAM, ACC, the big accounting consultants, and several big unions told employers not to do it. Most of their members or partners took the advice.
So, it's something that requires attention, but it's a small fraction of what it might have been.
Also, that EO said those that had the reduced withholding had to pay it back later.
So, they might do nothing.
Probably not, but ignoring it is at least a possibility.

[exboyfil]

5. Give them a year to pay it back

Relief for everyone would just hurt the system more.

[brooklynite]

6. My impression is that most employers didn't implement this...

[Salviati]

8. Here's what I'd do:

1) return the SS tax to normal for everyone starting in January.

2) implement a tax credit for everyone for the amount that would have been deducted during this scheme on peoples 2020 taxes. If your employer kept deducting as normal, you get a nice surprise, if they went along with this scam, at least there are no nasty surprises.

3) raise the cap on the SS tax to the point that we make up for the lost revenue in 1 year, and leave the cap at that level.

[onethatcares]

9. I LIke the way you think

even though I"m retired and collecting. The tax credit in the amount paid in knocks down any "What about me" arguments

Question: does the repayment lie directly on the employee or the employer? Seems that both have a trap they walked into.

Thanks.