Trump’s staff keeps undercutting his comments about his payroll tax plot: report
Donald Trump, Mike Pence and Steve Mnuchin

President Donald Trump has claimed that everything will be fine with the removal of the payroll tax, which funds the Social Security trust fund, because he will just throw money in from the general fund. But according to Trump staff, he's confused.


The Wall Street Journal reported Thursday that businesses aren't sure what to do because it would cause more difficulty on their side. The idea, however, isn't a law and it likely won't be enforced until Congress passes such a law, which isn't likely to happen since both sides oppose it.

“We’ll be terminating the payroll tax after I hopefully get elected,” Trump promised at the White House during his Wednesday press briefing.

But Trump's aides seemed to be either confused about Trump's plan or they're undercutting Trump's plan altogether.

"They say he is proposing something much more modest: forgiving any payroll taxes that get deferred this year as a result of the executive action," said the report. It's a huge difference from eliminating the funding source for Social Security.

Trump rolled out a series of "executive actions," on Saturday, as opposed to an "executive order." An order is legally binding, where an executive action is little more than a memo of a wish-list filed away somewhere and ignored. Trump has said that he wants to put the payroll tax on hold until the end of the year. After that, Americans would be forced to pay the tax in a large lump sum just after the Christmas shopping holidays. When faced with complaints, Trump suggested Congress pass a law forgiving the cut permanently. It isn't likely to happen either.

"If employers participate, the temporary payroll tax cut sought by Mr. Trump could reduce federal revenue by about $100 billion this year," said the Journal. "All payroll taxes, including those for Medicare, were $1.2 trillion in 2019. That’s 5.9% of gross domestic product last year and more than one-third of federal revenue."

The president doesn't have power to unilaterally cut taxes, only the legislative branch can deal with budgets and pass funding measures. It was something that former President Barack Obama did for a few months in 2011. The Republican-run Congress was willing to pass it then, but with months before an election, neither side seems to want anything to do with it.

The conservative U.S. Chamber of Commerce has already expressed concern, sending a letter to Treasury Secretary Steve Mnuchin with questions about how it would work.

“The uncertainty raised by these issues, as well as myriad other issues not enumerated here, only exacerbates the challenges faced by payroll processors and compliance departments who are already struggling,” wrote the Chamber's tax-policy chief Caroline Harris.

The American Institute of Certified Public Accountants sent a letter as well, saying that if Trump wants to do it, he shouldn't require Americans pay a huge lump sum at the end of the year and instead make companies pay for it. Given the hefty bailouts and loans handed out during the pandemic, plus Trump's major tax cut his first year in office, corporations should theoretically have more money than American workers.

Democrats oppose the policy of zapping funds that would go to the Social Security trust.

Read the full report at the WSJ.