Following is a statement by Steve Wamhoff, federal policy director at the Institute on Taxation and Economic Policy, regarding President Trump’s executive order that would suspend the employee side of the federal payroll tax from Sept. 1 through the end of the year.
“Policies, in theory, are supposed to solve problems, not create more. President Trump’s executive order on payroll taxes helps no one and makes life more complicated for anyone who makes the mistake of playing his shell game.
“If your employer participates, then you will see that Social Security taxes are not withheld from your paycheck for four months, but starting next year your employer will withhold double the normal amount to ensure that you pay back any benefit you received. No one has any idea what a company is supposed to do if an employee who benefited leaves to find another job next year before the money has been recouped through the increased withholding.
“Trump is now resorting to his most transparent tax ploy yet by essentially offering a tax break before the election that must be paid back after the election.“
Wamhoff’s recent blog outlines some of the policy challenges: https://itep.org/trumps-executive-order-on-social-security-payroll-taxes-is-a-mess/