President Trump suggested that his decision to defer payroll taxes for some Americans through executive order could become permanent, saying it “has no bearing” on Social Security benefits.
“This will have zero impact on social security,” Trump told reporters on Sunday before boarding Marine One. “We protect social security.”
In an effort to bypass a deadlocked Congress, Trump on Saturday signed four executive actions – including one postponing the collection of payroll taxes from Sept. 1 to Dec. 31 for individuals earning less than $ 104,000 annually, or less than $ 2000 per week.
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He said the cuts could be “permanent” but did not expand further.
Currently, all employees and employers pay a payroll tax of 6.2% on wages covered at $ 137,700. An employee who earns $ 50,000 a year, for example, pays $ 3,100 in taxes.
That money goes to specific programs such as Social Security, health care, unemployment benefits and workers’ compensation. Workers also pay a Medicare tax of 1.45%.
Defenders of Social Security were quick to criticize Trump for withholding taxes, suggesting it was part of a broader initiative to bolster the social program.
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“We just heard it right out of Trump’s own mouth,” Social Security Works wrote in a tweet. “If re-elected, he will destroy Social Security.”
The order is technically a tax evasion proposal – not a suspension – meaning the taxes will eventually be at a later date. However, Trump has promised to pursue a permanent tax cut.
“If I win on November 3, I intend to forgive these taxes and make permanent cuts to the tax rate. I will make them permanent, “Trump told a news conference on Saturday. In other words, I will expand after the end of the year and end the tax. “
At the end of April, the government projected Social Security, one of the largest federal benefit programs, not to pay many benefits as of 2035. At that point, only 76 percent of the benefits could be paid out. But that was before officials took into account the outbreak of viruses, which they agree will deal a substantial blow to the program.
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In addressing the crisis, the Bipartisan Policy Institute estimates that the date of exhaustion would jump from 2035 to 2029.
Most of the money that Social Security pays out in pension and disability benefits comes from payroll taxes; the program receives some additional financing from the taxation of benefits and interest earned on securities held by the trust fund.
“All three sources of revenue are threatened by the current recession,” added the Washington-based think tank.
In 2019, 54.1 million people benefited from Social Security. About 40 percent of Americans over the age of 60 who no longer work full-time rely solely on Social Security benefits for their income, according to the National Institute on Retirement Security. The annual benefit is about $ 17,000.
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