Donald Trump Vows to “Termimate” Payroll Tax in Second Term
President Donald Trump on Wednesday promised to unilaterally “terminate” the payroll tax if he scores a second term in the White House.
The payroll tax funds Social Security and Medicare.
“We’ll be terminating the payroll tax after I hopefully get elected,” Trump said at a press briefing. “We’ll be terminating the payroll tax.”
Trump claimed the savings would amount to “anywhere from $5,000 or more per family” and would be “great for businesses and great for jobs.”
“A lot of people will be very happy to hear” about the possible elimination of the payroll tax, Trump continued. “A lot of the great, certainly conservative economists, they think it’s the greatest thing you can do. That’s better than the payments, that’s better than anything else. But it’s a lot of money, and it’s going directly to the people and it goes there very easily. But it also creates stronger companies to employ the people. So we will be, on the assumption I win, we are going to be terminating the payroll tax after the beginning of the new year.”
But in an economy crippled by a pandemic, tens of millions of people are without jobs (many of which may be gone forever), and cutting the legs off the two most successful government programs since World War II would not do anything for them.
The payroll tax consists of two parts: 12.4 percent of workers’ paychecks per pay period for Social Security and 2.9 percent for Medicare. Each is typically split evenly between employees and employers on incomes up to $137,700. Incomes above that amount pay no additional Social Security tax. Incomes above $200,000 are subject to an extra 0.9 percent Medicare tax.