The President issued an executive order to defer the 6.2% payroll tax paid by employees
Why do I care? Why should we care?
The covid-19 pandemics warrants that the administration organizes help for employers and employees that were economically hit by the consequences of the spreading of the disease.
The choice of deferring the payroll tax instead of providing actual cash is not welcome, for two fundamental reasons:
-on the one hand, it is only a deferral, so the employees will have to pay it back next year, before the economic situation will be normalized.
-on the other hand, the payroll tax is what the employees pay toward Social Security, so that one of the perverse effects of this deferral is to shrink the cash flow of Social Security, and provide justifications to those who aim at suppressing Social Security as a whole. Shouldn’t we care?