President Trump has called on the IRS to stop collecting payroll taxes starting on September 1, and he wants to make it retroactive to August 1. No one is exactly sure how that will work, since businesses typically use payroll software to deduct the right amounts from their employees’ checks.
The president’s action doesn’t forgive the tax liability through the end of the year, it just puts a moratorium on collection. Technically, businesses still owe it when the IRS starts collecting again, so would they really allow employees to keep the cash, and then ding them for a big number in January? What about employees who quit, or are fired, during those months? The employer would still owe the tax.
The big presumption in all this is that at some point Congress will act to forgive those taxes, which means they will never be collected and employees can pass the money along to workers with no worries. But that brings up the other issue, what about the programs, Social Security and Medicare, that are funded by those taxes?
“We will bond out any additional money as we always do. The Treasury – we work through general revenues and issued non marketable securities to this even with forgiveness. It’s a very manageable number…we’re not ending the tax.”
You see? No problems, we can just borrow whatever we need, whenever we need.
If it’s so easy, why don’t they borrow $330,000,000,000,000 (that’s $330 trillion) and send every American $1 million?