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Tags: Donald Trump | IRS | Trump Administration | payroll tax cut

Businesses: Trump's Payroll Tax Cut Won't Work Without Congress

an irs building against a blue sky
The Internal Revenue Service building in Washington, D.C. (Zach Gibson/Getty Images)

By    |   Tuesday, 18 August 2020 02:47 PM

Thirty trade groups banded together and sent a letter to Congress and the White House saying President Donald Trump's payroll tax order won't work without Congress, The Hill reports.

The letter states that most employers would ignore the executive order the president issued earlier this month because it will leave employees with a large tax bill when the deferral period is up.

"Under current law, the EO creates a substantial tax liability for employees at the end of the deferral period," the letter said. "Without Congressional action to forgive this liability, it threatens to impose serious hardships on employees who will face a large tax bill as a result of deferral."

Trump said the tax liability should be forgiven, but the president doesn't have the ability to wipe out taxes. Congress would have to determine whether the tax liability would be eliminated.

If lawmakers do not approve forgiving the liability, employees would be on the hook for paying the deferred money to the government. The tax money, which is automatically deducted from paychecks, funds programs like Social Security.

Someone earning $50,000 a year would have to pay more than $1,000 in 2021, according to the letter.

"Many of our members will likely decline to implement deferral, choosing instead to continue to withhold and remit to the government the payroll taxes required by law," the letter said.

Lawmakers haven't shown support for cutting taxes. A payroll tax cut is not under consideration in the next coronavirus relief package that is currently at an impasse.

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Politics
Thirty trade groups banded together and sent a letter to Congress and the White House saying President Donald Trump's payroll tax order won't work without Congress, The Hill reports.
payroll tax cut
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2020-47-18
Tuesday, 18 August 2020 02:47 PM
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