As I noted therein:
"Regarding the Trump suspension of the payroll tax.....one aide admitted (Denver Post, today, p. 12A): "Yeah, it's really an interest -free loan that would have to be repaid, not a freebie."
Trump, in his phony "relief" package - to jog memories - did an end run around congress to cut payroll taxes, to make it look like he was extending a helping hand to the hoi polloi. Via executive action he invoked the ability to defer tax deadlines following a disaster (the Covid pandemic) to delay payments of the employees' portion of Social security taxes. The imp then promised if he won re-election he would convert the delay into a "real tax cut".
Well, Lordy be, it's a damned good thing he didn't win, because enough damage was done using this desperation con. Why a con? Here's the catch: The offer applied to workers making $104,000 or less who could then have as much as $2, 149 deferred. BUT, most employers balked - wary of potential complexities - including their costs in deferring the tax. Many more astute observers noted it amounted to little more than a short term, no interest loan, not a no strings relief. Now, the piper may have to be paid.
To wit, those employees who took advantage of the con and saw their payroll taxes temporarily shrink will now face double withholding starting in January. Trump never told them about that little niggling detail, did he? Nope, rat that he is, and con man, he did not. So now all the households that didn't plan for this hit will get clobbered.
And what did Trump do? Well, he barked to the taxpayers, 'Don't worry, it's no biggie!' Like he said the coronavirus would disappear. But that's the most corrupt president in American history for you, now in the midst of a "pay to pardon" bribery scandal. Oh wait, sorry, I'm jumping to conclusions? Well, we'll see.
In the meantime what's to be done to help the millions who fell for Trump's payroll tax cut con as the bills come due? One solution that's been touted (WSJ, Nov. 30, p. A5) is "forgiving" the unpaid thousands of dollars in taxes for these unfortunates. According to the Journal:
"Forgiving the unpaid tax has some appeal, because it would avoid the hardships of a sudden drop in paychecks and provide a boost for households."
Adding:
"The payback can be particularly messy if employees have left their jobs before it's complete and the government needs to find them or seek payment from their employers."
The main targets to help with this forgiveness would be federal employees including active military. Further "allowing forgiveness at this point, after so many employers didn't participate would give a windfall to federal employees and nothing to millions of other workers."
Of course, the other option is that congress could just do nothing which would "create burdens for federal workers and military service members who face a drop in take-home pay in January and didn't save the extra money" they got in 2020.
At the very least, all those employees deserve much more time to satisfy the debt that the scam artist Trump dumped on them. In the words of Tony Reardon, president of the National Treasury Employees Union, quoted in the WSJ piece:
"The outgoing administration's executive order temporarily suspending payroll taxes for federal employees without their consent continues to be a threat to their personal finances."
Well, and also to millions of Social Security recipients if all that money doesn't get paid back!
As I've noted in previous posts, e.g.
tampering with payroll taxes - irrespective of the administration- is always a bad idea given they are what support Social Security. The only alternative to that would be yearly budgetary allocations, and one can only imagine how that would play out with a Repuke House and Senate.
Again, thank Dotard Trump for this economic clusterfuck.
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