Chuck Schumer on ABC's This Week: Most employers will still withhold the payroll tax

[highplainsdem]

This part of what Schumer said today hasn't been getting enough attention.

If he's right, then the payroll tax deferral won't actually be implemented, because employers will be too practical to just delay collecting tax that will almost certainly be due in a few months.

From ABC's rush transcript of the show:


https://abcnews.go.com/Politics/week-transcript-20-senator-chuck-schumer-larry-kudlow/story?id=72266187

STEPHANOPOULOS: How about the payroll tax deferral?

SCHUMER: The payroll tax cut is another -- it's just way off-base.

First, most employers are not going -- it's a deferral, and so it accumulates until January, when it expires. Employers are just going to continue, withhold the money -- I have talked to some -- because they don't want their employees to be stuck with a huge bill in December.

So, it's not going to pump money into the economy. And, second, the president said if elected I will forgive all this, that depletes money out of the Social Security and Medicare trust funds. If you're a Social Security recipient or Medicare recipient, you better watch out if President Trump is re-elected.

[napi21]

1. The MAIN problem with DT's PR tax game is it does NOTHING for the unemployed! n/t

[C_U_L8R]

2. And it's just a deferral

Sounds more like an easy way to screw up everyone's accounting.
It saves no one anything.

[highplainsdem]

5. Trump's apparently trying this because Stephen Moore told him that he could:

https://thehill.com/homenews/administration/510365-trump-says-hes-considering-executive-action-to-suspend-evictions

Trump also asserted that he had unilateral authority to suspend the payroll tax.

“I can do that also through executive order, so we’ll be talking about that,” Trump said.

Trump’s admission came after conservatives Stephen Moore and Phil Kerpen penned an op-ed in the Wall Street Journal urging Trump to declare a national economic emergency and to direct the IRS to suspend collection of payroll taxes.

They argued that Trump could defer payroll tax payments using the same section of the tax code used by Treasury earlier this year to postpone the 2019 tax filing deadline until mid-July. The move would amount to a deferral, though the two argued that Trump could pledge to sign a bill in the future to forgive the repayments.

[Mike 03]

3. Kicking

I've spoken to some people over the last week who don't understand the relationship between the payroll tax cut and Social Security and Medicare. They are intelligent, but they don't quite understand what this is really about, and they sound skeptical when I try to explain.

[highplainsdem]

4. Same here. I'm guessing Trump and his enablers are betting people don't know what that tax pays for.

[MichMan]

6. If indeed it is just being deferred, why do people keep saying it cuts SS?

Wouldn't it end up getting paid into Social Security and Medicare anyway?

[highplainsdem]

7. Because Trump's plan is to force through legislation, which he's promised to sign, to waive the

repayment.

And yesterday he also said that he'll "terminate" the tax, which to most people meant getting rid of the payroll tax completely, not just deferring it and then waiving the deferred payment. Which would completely defund both Social Security and Medicare.

Simply getting rid of months of payments into the fund is a dangerous cut, though. We need increased funding, payroll taxes that apply to all wages no matter how high.

[napi21]

8. He also said if he's reelected he'll make it go away permanently. n/t

[MichMan]

10. Since he won't be re elected it doesn't matter then

Prrsident Biden can order it all be repaid

[democrattotheend]

11. Which would be politically toxic

Sorry, but if the tax is deferred Biden cannot come in and have one of his first actions be to stick everyone with a big back tax bill. Really bad idea politically. Even if he doesn't plan to run again, it would hurt the whole party if he does that.

[ProfessorGAC]

9. I Don't Agree

They may allow employees to opt out, but many big companies will hold back the company share.
They can use that as freed up cash to reduce or eliminate short term cash flow borrowing.
Those LOCs carry no interest, but involve a 1/8th percent fee. (Typically)
If they're pulling LOC money every month at $10 million, they save 1/8th percent of $10 million ($12,500) each of the next 5 months. It's $62,500 of free money. About $45,000 after taxes.
After the accounts receivable come in, they have the cash back. Subsequent months, they use month 1 money over & over. The other 4 months get banked. When the moratorium is over, they return the cash and added $45k to the net income.
If I thought of this, you know finance & accounting folks at those companies did, too.
I say they're going to NOT pay the company share during the deferral period.

[Bengus81]

12. I sure as hell would if I had employee's. Getting STUCK for that tab later on

wouldn't be pretty.