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How Trump could force a payroll tax holiday without waiting for Congress

  • August 03, 2020

President Donald Trump might not have to wait for Congress to pass his payroll tax cut. He may be able to do it on his own.

Rather than waiting for lawmakers to come around to a payroll tax holiday, the president could order the Treasury Department to stop collecting the tax, according to an Aug. 2 op-ed in The Wall Street Journal.

The opinion piece was authored by Stephen Moore, a member of the president’s economic recovery task force, and Phil Kerpen, president of the Committee to Unleash Prosperity.

Payroll taxes are the slice of employees’ pay that’s withheld to fund Social Security and Medicare.

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The burden is shared by the worker and the employer: Each is responsible for a 6.2% levy that funds Social Security, plus a 1.45% tax that goes toward Medicare. While Social Security taxes are subject to a wage base limit of $137,700 in 2020, Medicare taxes continue to apply beyond that threshold. 

To get the payroll tax break — a deferral, according to Moore and Kerpen — the Trump administration would employ a section of  the tax code that allows the Treasury Secretary to postpone certain tax-related deadlines in a federally declared disaster.

Earlier this year, the administration used this same authority to delay the due date for 2019 federal income taxes.

“Mr. Trump should instruct the Treasury to stop withholding payroll taxes,” Moore and Kerpen wrote.

Article source: https://www.cnbc.com/2020/08/03/how-trump-could-force-a-payroll-tax-cut-without-waiting-for-congress.html

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