Trump wants to scrap payroll taxes that fund Social Security, Medicare - Business Insider
Category: News & Politics
Via: jbb • 4 years ago • 108 commentsBy: Joseph Zeballos-Roig (Business Insider)
In this one case I am believing Trump is not lying...
S E E D E D C O N T E N T
US President Donald Trump speaks during a news conference in Bedminster, New Jersey, on August 7, 2020. JIM WATSON / AFP
- President Donald Trump vowed on Saturday to scrap the payroll tax, a funding mechanism for Social Security and Medicare, if he wins re-election.
- "If I'm victorious on November 3rd, I plan to forgive these taxes and make permanent cuts to the payroll tax," Trump said at a press conference announcing executive actions on coronavirus relief.
- Experts say the move to cut payroll taxes would further erode the shaky finances of both programs.
- Visit Business Insider's homepage for more stories.
President Donald Trump pledged on Saturday to scrap the payroll tax, a key mechanism that's used to fund Social Security and Medicare.
"If I'm victorious on November 3rd, I plan to forgive these taxes and make permanent cuts to the payroll tax," Trump said at a press conference. "I'm going to make them all permanent."
He later said: "In other words, I'll extend it beyond the end of the year and terminate the tax. So we'll see what happens."
The payroll tax funds Medicare and Social Security
The federal government imposes a 15.3% levy on wages known as the payroll tax. It's evenly divided between employers and workers, and most of it goes to fund Social Security. It also helps to finance Medicare, the federal health insurance program for people over the age of 65 and for younger Americans with disabilities.
In an April 2020 Gallup poll, 58% of retirees said they relied on Social Security for a "major source" of their income.
Trump's unexpected comments on Saturday came as he signed an array of executive actions aimed at providing relief to Americans during the pandemic. Among them was a payroll tax cut, which he is waiving from September through the end of the year for workers earning below $100,000 a year.
But it doesn't forgive workers' payments outright since the power to eliminate taxes or change the tax code rests with Congress. As workers and employers are still legally on the hook to make those payments next year, experts say it's unlikely that people will see a bump in their wages anytime soon.
Plus, lawmakers from both parties roundly rejected including a payroll tax cut in their stimulus proposals. Many economists say it would not benefit the 31 million unemployed Americans, either.
Congressional action to eliminate the tax entirely is also improbable, and instead set off a fraught debate over the federal programs' fiscal futures.
Medicare and Social Security's finances are already shaky
Economists from the left-leaning Center for American Progress warned on Thursday that Trump's push to enact a payroll tax cut could further erode their shaky finances.
"Trump's scheme would weaken the Social Security and Medicare trust funds by diverting the revenue from the employee portion of Social Security and Medicare taxes, and potentially the employer's share of Medicare taxes, from the programs' trust funds," a memo from the organization said.
The trust funds for both programs are scheduled to be depleted in this decade. The Bipartisan Policy Center projects that if economic damage was similar to the Great Recession a decade ago, the Social Security trust funds could be depleted in 2029. That could prompt a 31% cut in retirement benefits, the organization said.
The Medicare trust fund is in worse shape. Its trustees said the program would run out of money in 2026 — also without accounting for the pandemic.
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I surely hope you guys are saving for retirement...
Gee... a Republican President is trying to sabotage Social Security and Medicare!
Gosh!
And the defenders blindly accepting it.
What ever happened to these Trump supporters?????
Gosh, such angst over a cut!!
I don't remember all this whining when cuts were enacted under Obama the Great!
I don't remember Obama cutting taxes via Executive fiat. Perhaps you can post a link to remind me about that event.
Taxes were cut, look it up your own self if that interested.
And now the same folks who cheered for tax cuts under Obama are bitching about tax cuts under Trump.
Wonder why?
Naw--me either--just TDS on display.
No I don't.
Signing a BILL passed by Congress is the proper process. Your false equivalency is a failure.
Why are both Trump and McConnell sitting out the negotiations? Why can't Trump, the 'Great negotiator', get Congress together to pass a bill?
Oh and why do you acquiesce so readily to Trump's Executive actions that are an attempt to sidestep Congress? I seem to remember you and yours whining about them when Obama used them. You're all about the whataboutism after all.
No. I thought I made it pretty clear I was referring to TDS-driven drivel.
Should I make it clearer for you, or will that suffice?
As I remember the left cheering Obama for his actions.
And now condemning Trump for utilizing the very same tools that Obama the Great did.
And your whataboutism is batting 1.000!
Just ODS on display...
Our republican congress opposed tax cuts every time Obama proposed them. Why? Because they were for the middle class, not the 1%er's.
Speaking of middle class tax cuts, what happened to trump's 10% tax cuts for the middle class he pushed in October of 2018?
He flat out lies to his base and they fall for it every single time.
Narrow it down.
Which part didn't you understand?
I agree, Trump is delusional, as are all too many of his followers.
No he just rewrote immigration laws by executive fiat and it was pointed out repeatedly that if he could do that, then a President could stop enforcing tax laws as well. "Pen and phone" supporters can't possibly be surprised by this, since Trump is just following the Obama precedent.
You should be celebrating, Obama's expansion of executive power is getting enshrined in our political system. Democrats wanted an all powerful President, remember?
People who cheered when Obama lowered taxes are now bitching because Trump lowered taxes.
That is either TDS-driven, or is extremely hypocritical of them.
I believe it is TDS driven. Am I wrong, and it is just hypocrisy?
okay then.
I answered what you asked.
If you don't like the answers, ask different questions.
You predicated this discussion by comparing Obama's and Trump's tax cuts. The SEED is about Trump's payroll tax 'deferral'.
I asked you to cite when Obama used an Executive action to cut taxes Tex. Instead of posting a link to prove your claim, you're deflecting.
Because if you don't have proof that Obama used Executive action to cut taxes [and we both know you don't] you are merely posting the same bullshit lies, over and over.
As I already pointed out, Obama signed bills, Trump signed Memorandums. Trump IS NOT 'utilizing the very same tools'. Just stop.
I merely followed your lead but based on your scoreboard, I'm doing a hell of a lot better at it.
Care to answer my questions?
A tax cut is a tax cut--unless you think they aren't.
You just want to complain because it is Trump, following Obama the Great's lead on executive actions.
Whine to someone who cares--it ain't me!
The house passed a bill in MAY and it is still sitting on McConnell's desk. If the Senate GOP wanted to 'negotiate', they could have and should have been doing so in MAY, JUNE and early JULY. McConnell can't get his own caucus to vote for a bill and he's too power hungry to work on a bi-partisan Senate bill so he put out the POS they filed in the Senate. THEN McConnell walked away and turned it over to Mnuchin and Meadows and Trump's ever changing 'demands'.
So please, spare me the BULLSHIT about the Democrats when it's clear to any thinking person that the GOP is utterly incapable of leadership.
Climb down off the soapbox.
What is odd to me is this delusion that I or other people automatically agreed with everything Obama did, when that is far from the case.
Sounds like projection from the people that have some need to think everything donald does is great.
The rest of your comment is merely deflection. Well done.
Well since a 'deferral' isn't a cut, they aren't.
I'm not complaining or whining. I'm merely trying to take on the gargantuan task of attempting to get you to support your own bullshit.
Always like a little humor to start the day with.
Well they seem to think that their sycophancy for Trump is automatically justified by the allegation that all liberals were sycophants for Obama.
Pure whataboutism but WTF would they have without it?
If you meant for your comments to contain humor, you failed.
Now, got any answers for my questions or a link for that Obama EO? Anything other than deflection?
my comment was not humorous, it merely noted the humor in your post.
Did you not get it?
My comment was not humorous, it merely noted the lack of credibility in your post.
Did you not get it?
Your comment was funny.
unintentionally, perhaps..
But funny!
[Deleted]
Your comment lacked credibility.
Intentionally, perhaps..
Like I dismiss as poisonous all those afflicted with TDS.
The ones who do nothing but whine about Trump every single day.
I am sorry you don't understand.
When that's all you got . . .
[Deleted]
I couldn't care less whether you do or not.
a lot of angst and an opportunity for the 'I Hate Trump' crowd to speak up. Outside of that a lot of nothing. The President cannot do this by himself, a change like this must go thru Congress as only Congress can change tax law. Hell, the payroll tax forgiveness Trump just signed is not a forgiveness but rather a delay. Unless congress passes a bill to forgive the debt all the people who get their payroll tax forgiven thru the end of the year will still have to pay it back. But that will make for an interesting fight, who will want to fight against any forgiveness on this repayment and look like the bad guy...
In reality all this is, is a presidential candidate making a promise to gain political votes much like the other side promising to pass Medicare for All. The president by themselves cannot do either of these things.
All 4 of his 'Executive actions' are a whole lot of nothing.
Trump's 'bill signing' is just bad Kabuki theater with orange make up.
Then why are so many bitching?
That makes no sense at all.
Actually I think the $400 a week unemployment payment is a good thing for the people who need the money due to being out of work and I think it's a terrific political act. He bypassed all of congress and IMO the people who get these payments may not look kindly at Democrats who push legal actions to prevent it from happening. I'm not a fan of the payroll tax deferment but it will be interesting watching after the election to see how hard they all fight to push thru any forgiveness of the tax debt. My guess is that people will have to pay that tax deferment back as Washington will figure they have two more years to re-win the hearts and minds of the tax payers who pay double SS payments in 2021.
And the extension of student loan relief is good. Student loan debt is so high, holding off on collecting the monthly payments and during that time setting the interest rate to zero so that the debt doesn't grow I think puts a lot more money back into the pockets of people who can use that money right now. So that's a good one also IMO.
I'm not a fan of the payroll tax holiday and the fourth one on assistance to renters and homeowners really offers no help. But TBH there is little in that regards the President could do all by himself as it would require new money which can only come out of Congress.
Unfortunately, since Trump didn't use his 'Great negotiator' chops to get a deal, his Memorandum requires that states set up an entirely NEW system to dole out that funding.
Oh and BTW, that isn't NEW funding, it merely delegates already existing funds.
Also unfortunately, few states have the existing funds to meet the 25% threshold in the Memo.
Because Trump and his sycophants are holding them up as the greatest things since sliced bread.
To you perhaps.
To me, to sane folks
It's 'unconstitutional slop'
If anything they need to increase what is taken out.
Hell a couple of extra dollars a month people would not even notice yet it would go a long way towards the health of the program.
The whole tax relief scheme is bull to begin with. With everything going on that should not even be on their radar.
Lower taxes is just a feel good meme for the gullible. And by gullible, I mean idiots that think they shouldn't have to pay anything, even though they use the services.
Actually I think they need to do a lot more to fix the problems with this ponzi scheme program.
When Social Security was started back in Aug, 1935, the life expectancy for men was 58 and 62 for women. So setting the full retirement age at 65 meant that a lot of the target group could have already passed, leaving a lot more money available for the remaining people. Life expectancy started to increase which is why back in 1983 legislation was passed to change Social Security including gradually raising the full retirement age to 67. But they left the eligibility age for Medicare at 65.
In 2019, the average life expectancy in the US is 72.6 years so more people are living to draw out of the SS coffers. And we see more and more people making it to 100 today. So it's very understandable to see that the system is under considerable strain.
I would suggest that it's again time to rework the retirement ages for Social Security. I would have them expand the full retirement age ( in a stepped progress similar to how they did it in 1983) out to 70 or 72, and I would have them also set the Medicare eligibility age to the same age as full SS retirement. That would be a big help to the health of Social Security.
Life expectancy in the US is about 78.
Most people do not live to be even 90.
If one averages it out it would be receiving benefits for about ten years.
Some people never make it that far and some people with disabilities are on it for a long time.
Some take it early for a reduced amount.
It is not black and white and one cannot put it all in one neat little box.
Google is interesting. My earlier search has shown an average life expectancy in the US to be 72.6 and now all I can find is 78. Sometimes google is not your friend.
Yes, it's definitely not black and white but the life expectancy has been inching up for many years and more people are living longer lives. As I said, when Social Security was first started the average life expectancy was less than the full retirement age of 65 so there were fewer eligible people as a percentage, more people were dying before they were able to start drawing. In 1983 Congress reworked the rules for Social Security to extend the life of the program due to people living longer. I believe it's time to do so again. Doesn't mean they can't have early retirement at a reduced amount similar to what we have today, and those on disabilities are not included in my discussion, the disabled are those that we as a civilization must protect and care for. But I firmly believe that it's time to again revisit the program and extend the age for full retirement and I think they should tie the Medicare age to the full retirement age.
I'm not in favor of scrapping Social Security and Medicare, there are too many people who will need it at some point in their lives. Even the idiots who haven't bothered to save for their retirement should not be just tossed to the wolves, I think that will end up costing us more than SS in the end.
I noticed that too. I thought it was lower than the 78.
What gets me though is we are falling behind several other countries in that regard.
As far as the Medicare, I am still for all get it. A healthy population is a better working population.
I have no problem with lifting the cap. As I pay income tax on all my earnings (which are above that 137,700) then I should also pay my SS & Medicare taxes on all income. I never have had a problem with that.
Placing an additional 50% tax on lawyers share of settlements? How would that be any different than the Make Billionaires Pay Act?
IMO those large taxes only encourage the recipients to find other ways to avoid said tax bill. Then to combat that the IRS hires more staff and lawyers to further tighten up tax code to eliminate the holes used. And in the end we end up with a huge mess that just costs more money. I would prefer a simplification of taxes myself.
Like you, I pay every dollar in taxes that I am legally required to pay. All I said above is that I would not have an issue with them raising the cap on income for the SS cap. Never said anywhere that I like paying taxes.
The democrats in the big cities are pushing to eliminate immunity for the police, who gets rich if this happens?
Well, with qualified immunity, the tax payers are on the hook for every infraction that makes its way to court. We have police in several cities and counties that have cost the local tax payer in excess of 40 million dollars. I don't know about you but I don't like having to pay for the damages every time some stupid cops decides to abuse his authority. I say make the offending officer and/or the police union pay the fines and not the tax payers!
The tax payers get "rich," that's who!! I live in CO and I'm tired of my taxes being used to cover for some stupid cop's mistakes.If you F*** Up as a law enforcement officer you should have to pay your own fine, LIKE EVERYONE else who loses in court.
Good these are the type of taxes that are boat anchors around our necks making us less competitive in the global marketplace.
Really? Which country is out competing the US because they don't have Social Security taxes Dean?
Just my own opinion...but, from the very obvious gamesmanship being played out by the GOP and Trump in regards to the endlessly and deliberately failed stimulus talks.
Trump needs desperately to deflect from his totally lack of leadership and try to save some face with the election just around the corner. Thus, the GOP has declined to work earnestly with the Dems to do right by the people of America, who are looking to them to earn the money the honest working people of America are paying them, by putting the lives of the people first, not their F-ing party and their own pockets. They need to be greedy for the for America and its people now, not for their and party and themselves.
I think the delay of the stimulant bill was done deliberately by the GOP. Why? Simple.
Trump's voter appeal is in the dumpster, and he is looking for any reason to look good, no matter how many lives it desperately affects. So by making the GOP delay the bill by not coming to terms to get it done, he will look like the good guy to step in and come to the rescue of his people <cue God-like music in background>
Down and dirty, just the way Trump likes it. Never mind the millions of people who are suffering with no real hope in sight as to when any kind of normalcy might return to their lives, if they don't die first from COVID-19.
Naturally, the GOP will blame the Dems for not coming to agreement on the bill, which falls far from what is really needed to help save our people, but, as long as their God chosen leader and their party reign supreme they couldn't care less. Why should they? The American people to them are just pawns in their sick and repulsive game of politics, and therefore, totally expendable if need be to gain the lead in their filthy game of party politics.
However, at this point those who are suffering the most in all this 'party first' gamesmanship to try to make the most despicable and repulsive amoeba to ever sit behind the desk where so many far more qualified and deserving Americans have sat since our country started, will only make him more intolerable.
Trying to take away the only source of income millions of aging Americans have to live on and the only medical care they can get, sparse and inadequate as it is, in the name of political one-up-manship, is inhumane and cruel.
But, that is the name of the game with Trump and his GOP party of traitors of America and its people.
Trump will one day have to face all those he so callously caused to die, when he could have, should have, done what was desperately needed in the first place....listen to the experts on such a huge and world wide devastating killer as the COVID-19.
He has no one to blame but himself. However, he will likely say....it was the Devil Dems who did it, not me.
He'll need a lot of help with that one.