ATLANTA — The so-called payroll tax holiday, or deferment, is a temporary measure, that may sound nice on the surface, but may be something less pleasant for many people in the long run.
President Trump's executive order that creates the tax measure, signed over the weekend, was one of four.
The order directed Treasury Secretary Steve Mnuchin to defer some payroll tax obligations.
According to Trump, workers who get paid less than $104,000 per year before taxes would be eligible for this deferment. The deferral would run from September 1 through December 31, 2020.
Ordinarily, employees and employers each pay half of the total 12.4 percent Social Security tax that is ordinarily due for each worker.
Under the president's executive order, employees would see their half of that 12.4 percent - or 6.2 percent of their total bi-weekly salary - added back to their paycheck during the deferral period.
While there would be a slight increase in pay for most workers, opponents of the move say it would not provide the kind of incentive to the economy that a one-time cash payment would, as the $1,200 payments disbursed earlier this year under the CARES Act.
In addition, critics say it would weaken Social Security, something that the president had promised as a candidate that he would not do.
According to US Rep. John Larson (D - Conn.), Trump is "defunding Social Security and breaking his promise. ... He will say, 'I'm not doing anything to touch Social Security, I'm just deferring this,' but it's as clear as my hand in front me."
The executive order refers to the measure as a deferral as opposed to an elimination of the tax, which implies that the monies retained by the employees would have to be repaid to the government at some point.
Trump says that he has directed Mnuchin to work with Congress to forgive the entire amount of the payroll taxes deferred.
The final question - would this come in the place of another lump-sum payment along the lines of the CARES Act disbursement?
Right now, no one knows. Congress has not come to an agreement on a new payout for taxpayers.
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