President Donald Trump has pushed the idea of a payroll tax cut as one way to stimulate the economy as part of a new COVID-19 stimulus package, but he is getting push back from nearly everyone with the exception of members of his administration.
A payroll tax cut may sound like a great idea to taxpayers, but if you analyze what a payroll tax cut really does it should give most people pause. The majority of members of the Republican Party do not support a payroll tax cut and uniformly, the Democratic Party does not support it due to its limited likely relief and its impact on government programs. One of those programs is Social Security.
Instituting a payroll tax cut would deprive Social Security taxes to the agency to pay for retirement, disability and survivor’s benefits. It should be no secret that Social Security is right now is in a funding crisis and will be unable to meet 100 percent of its obligations within about 15 years, so taking dedicated money away from Social Security is a bad idea.
Like all kinds of tax-cut proposals it sounds good to a lot of people, but it you look at the repercussions of such a move it seems a lot less appealing. A payroll tax cut would only provide temporary relieve to Americans who are suffering financially due to the COVID-19 pandemic, and it would not provide enough financial relief to people to make a significant difference. Additionally, a payroll tax cut would only exacerbate the funding issues of Social Security because a payroll tax cut would eliminate, temporarily, Social Security taxes.
There are good reasons that not only Democrats oppose a payroll tax cut, but also most Republicans. It would defund Social Security and provide only nominal relieve to the American public and it is time to stop considering this idea.
