by Among the items that President Trump issued an "executive action" about three weeks ago was that for people earning less than around 4.000 per year, their fica taxes were to be postponed until Jan. 1, not cut, merely postponed, although Trump made noises that if he is reelected he will simply eliminate the fica tax entirely, although unclear how he plans to fund Social Security without it. Anyway, Allan Sloan in the Washington Post reports that this initiative is now just completely dead in the water. It has too many problems, too many opponents, and action on implementing it in the Treasury Department has simply stalled out, almost certainly for good due to all this. Quite aside from people facing potentially huge fica tax bills in January due to four months of postponement, it
Topics:
Barkley Rosser considers the following as important:
This could be interesting, too:
Matias Vernengo writes Elon Musk (& Vivek Ramaswamy) on hardship, because he knows so much about it
Lars Pålsson Syll writes Klas Eklunds ‘Vår ekonomi’ — lärobok med stora brister
New Economics Foundation writes We need more than a tax on the super rich to deliver climate and economic justice
Robert Vienneau writes Profits Not Explained By Merit, Increased Risk, Increased Ability To Compete, Etc.
Among the items that President Trump issued an "executive action" about three weeks ago was that for people earning less than around $104.000 per year, their fica taxes were to be postponed until Jan. 1, not cut, merely postponed, although Trump made noises that if he is reelected he will simply eliminate the fica tax entirely, although unclear how he plans to fund Social Security without it.
Anyway, Allan Sloan in the Washington Post reports that this initiative is now just completely dead in the water. It has too many problems, too many opponents, and action on implementing it in the Treasury Department has simply stalled out, almost certainly for good due to all this. Quite aside from people facing potentially huge fica tax bills in January due to four months of postponement, it apparently is very complicated to set this up, and would take many months to do so, involving businesses and the Treasury Dept. having to put in place all kinds of mechanisms to figure out exactly which people would get their taxes postponed and which would not. A real killer is that businesses pretty much across the board have objected to this proposal, with this now official as 30 different such groups have called for the cessation of this effort through the US Chamber of Commerce. This is just going nowhere.
This should be contrasted with the temporary fica tax cut that Obama had in place during 2011-2012. There are two large differences between that and what Trump has so incompetently proposed. One is that Obama had it pass through Congress, not be the result of a presidential directive or memo. The other is that it was completely simple: all Social Security taxes stopped being collected for the period in question, not a system based on treating people differently based on their incomes and also not a postponement. It was a straight cut, if only a temporary one.
An odd aspect of that Obama cut was that when it came to an end the GOP members of Congress were pretty near unanimous in voting to end it and bring back fica taxes. Somehow this did not prevent them from continually ranting about supporting tax cuts and opposing all tax increases. Of course it was technically not an increase but simply undoing a cut, but funny how something that raised taxes more on poorer people received their ready support as they argued for cuts for higher income people and still do.
Barkley Rosser