| On behalf of all older Americans, AARP sent a letter on Sept. 22 to congressional leaders to support a joint resolution disapproving of the new rule allowing temporary suspension of the collection of payroll taxes that largely fund Social Security.
A presidential order issued on Aug. 8 allows employers of workers who make $4,000 biweekly or less to temporarily suspend their 6.2 percent portion of the payroll tax from Sept. 1 through Dec. 31. Few employers are participating, and the taxes would have to be repaid in early 2021, but President Donald Trump has stated publicly that he would, if reelected, work to have repayment of the deferred payroll taxes forgiven.
AARP has long opposed any suspension or deferral of the payroll tax, which would not help unemployed workers and could, potentially, undermine Social Security’s funding.
“As AARP raised in letters to Congress back in March and President Trump and Treasury Secretary Mnuchin in August, we believe suspending, reducing or eliminating contributions to Social Security will interfere with the program’s long-term funding stream,” Nancy A. LeaMond, AARP’s executive vice president and chief advocacy and engagement officer, wrote in the Sept. 22 letter supporting a joint resolution of congressional disapproval of the payroll tax deferral. “These concerns are consistent with those we addressed to President Obama in 2012, that payroll tax holidays ‘undermine confidence in Social Security and put at risk the program’s dedicated funding stream and the hard-earned benefits of millions of Americans and their families.’ ”
Temporary assistance for some
Workers would have to repay the Social Security payroll taxes eventually, either in one lump sum at the end of 2020 or by paying extra payroll taxes during the first four months of 2021. The 1.45 percent payroll tax that goes toward Medicare would not be deferred.