Suspend Payroll Tax thru 2020 ?

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  • 4651feeder

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    Have only seen this reported on Breitbart, the article claims Trump intends to suspend payroll taxes thru the end of the year by Executive Order and then goes on to later use the word "defer" as though they are interchangeable which in my mind they aren't. Can anyone give me the short lowdown on what this means with regard to my federal payroll taxes thru 2020 if it is successful. Will they still be withheld?

    https://www.breitbart.com/politics/2020/08/07/donald-trump-to-suspend-payroll-tax-until-end-of-2020/
     

    DoggyDaddy

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    Have only seen this reported on Breitbart, the article claims Trump intends to suspend payroll taxes thru the end of the year by Executive Order and then goes on to later use the word "defer" as though they are interchangeable which in my mind they aren't. Can anyone give me the short lowdown on what this means with regard to my federal payroll taxes thru 2020 if it is successful. Will they still be withheld?

    https://www.breitbart.com/politics/2020/08/07/donald-trump-to-suspend-payroll-tax-until-end-of-2020/

    Yeah, I would be interested to hear what that's going to do. To me, "suspend" means stop collecting them for awhile and start collecting them again at some future date. "Defer" means that they'd stop collecting them for awhile but then they'd eventually collect the amount that would have been withheld.

    I also wonder what that would do come tax time next year. Let's say somebody is making $50K per year, but then they "suspend" withholding, such that they only collect enough to account for $30K worth of that income. Will that person be taxed at the $50K rate come April (or whenever it ends up being), or would they be taxed at the $30K rate? If at the $50K rate, then that seems like a "deferral". If at the $30K rate, then that would be a "suspension" (in other words the extra income would literally be tax-free). That seems like an accounting nightmare, not to mention what it could mean to someone finding out that instead of a refund, or perhaps owing a small amount, they could be hit with a tax bill for the amount that would've been withheld but wasn't.
     

    Leadeye

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    The important part of his plan is that you have to be working to get the benefits of it. Other plans being circulated involve people being paid the equivalent of $15/hour to stay home in perpetuity. Combine that with the issues the education/industrial complex is having and you have additional motivation for people to never go back to work.


    Relative to schools my opinion is to just close the entire system for a year completely. Everybody is suspended for a year, you graduate high school at 19 instead of 18, college is closed as well. All this patchwork E school/regular school stuff doesn't look like it's going to be much use in educating people or controlling covid.
     
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    jamil

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    In Trumps announcement I thought he said “suspended” for the payroll tax, and “deferred” for student loan interest. Then at some point he used “deferred” when talking about the Payroll tax.

    It’s unclear what he meant, but I suspect he got the terms confused while speaking. It wouldn’t make sense to defer payroll deductions. Not that suspending them makes sense, but deferring payroll deductions would be retarded. If it were a deferral, smart people would tuck away the money they’d normally have deducted, preferably in some short term interest bearing investment. But people are foolish and they’d just spend it, and that would totally **** them in April. So I’d be very surprised if it’s deferring the taxes.

    But regardless I think it’s intended to be a mind**** to get Democrats to drop the bat **** crazy. I don’t know if it’ll work. I’m not convinced that their best move is not Just to call him on it.
     

    DoggyDaddy

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    Sounds like it's a done deal. Just saw breaking news on WTHR saying he signed the EO. This is going to have a direct impact on my work (payroll system for the DoD).
     

    4651feeder

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    Sounds like it's a done deal. Just saw breaking news on WTHR saying he signed the EO. This is going to have a direct impact on my work (payroll system for the DoD).

    How did Ark expect one of to call him when this happened without his # ?

    Did finally see MSM coverage on this today as always questioning the legality of such a move.
     

    DoggyDaddy

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    Sounds like it might be prudent for me to adjust my direct deposit to deposit extra funds into savings that would have normally been withheld for taxes.
     

    4651feeder

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    So the way I'm reading this is currently payroll taxes on those earning $100,000 or less are deferred and if reelected Trump intends to have those deferred taxes forgiven?

    Is that because it will take an act of Congress to forgive those taxes?

    The idea seems brilliant from a distance....but if he was unable to get Congress to act now on relief, why should we believe Congress will change enough in 2021 for action on this?
     

    jamil

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    So the way I'm reading this is currently payroll taxes on those earning $100,000 or less are deferred and if reelected Trump intends to have those deferred taxes forgiven?

    Is that because it will take an act of Congress to forgive those taxes?

    The idea seems brilliant from a distance....but if he was unable to get Congress to act now on relief, why should we believe Congress will change enough in 2021 for action on this?

    Well, it does put the burden back on congress to be the bad guys and tell Americans they owe Uncle Sam a **** ton of money.
     

    DoggyDaddy

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    KittySlayer

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    Wether a deferral or suspension the government has not slowed down its spending. We will be paying this debt back through taxes for the rest of our lives as will our children.
     

    DoggyDaddy

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    Wether a deferral or suspension the government has not slowed down its spending. We will be paying this debt back through taxes for the rest of our lives as will our children.

    Oh no disagreement there. But to say that Trump has said that he plans to permanently do away with payroll taxes, Social Security and Medicare is just flat out false.
     

    foszoe

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    We have different definitions of flat out false, I guess, but, from what people tell me, I do tend to get bogged down in definitions.

    https://www.newsmax.com/us/payroll-...ictions-executive-order/2020/08/08/id/981236/


    In essence, the deferral is an interest-free loan that would have to be repaid. Trump said he’ll try to get lawmakers to extend it, and the timing would line up with a post-election lame-duck session in which Congress will try to pass government funding bills.

    “If I win, I may extend and terminate,” Trump said, repeating a longtime goal but remaining silent on how he'd fund the Medicare and Social Security benefits that the 7% tax on employee income covers. Employers also pay 7.65% of their payrolls into the funds.
    Oh no disagreement there. But to say that Trump has said that he plans to permanently do away with payroll taxes, Social Security and Medicare is just flat out false.
     

    DoggyDaddy

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    We have different definitions of flat out false, I guess, but, from what people tell me, I do tend to get bogged down in definitions.

    https://www.newsmax.com/us/payroll-...ictions-executive-order/2020/08/08/id/981236/
    Again, I believe he was talking about extending (and terminating) this temporary payroll tax suspension/deferral. However if one can show where he said he intends to permanently eliminate payroll taxes and defund Social Security and Medicare, instead of providing their interpretation of what he meant, then I'll be open to having my mind changed. I've not seen a quote nor heard a sound bite of him saying that however. Simplest explanation of why he "remained silent" on it is that he simply did not mean that.
     
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