A recent letter to the editor said that the payroll tax cut will harm seniors. Is this a true statement? Let’s look at the facts.
A recent letter to the editor said that the payroll tax cut will harm seniors. Is this a true statement? Let’s look at the facts.
• The payroll tax action is a temporary deferral, not a cut, and is a deferral only on individuals making less than 100,000 dollars a year. This is temporary aid to individuals during this pandemic, much like an interest-free loan targeting middle- and low-income individuals. The temporary deferral is only until year’s end. Beginning next year the payroll tax will double until the amount is paid back. Only an act of Congress can make the amount a tax credit so it doesn’t have to be paid back. That means the House of Representatives has to pass the law to make the change, so you need to contact congressional representatives and let them know your feelings;
• While the tax is mandated by the Social Security law, the taxes go into the general fund of the U.S. government. The benefits come out of the general fund. The taxes don’t go into a special fund, but are accounted for in the general fund. This change was made during the Johnson administration in 1968, although there is some hocus pocus accounting for the money;
• The fund is safe for about 13 years, and then it is projected to have problems. This short-term deferral is only a drop in the bucket and won’t hurt seniors. To preserve Social Security for the long term Congress needs to act. But when anyone tries to solve the problems that Social Security will face in the future, other politicians use their solutions as weapons against them;
• The letter also states that four more years will hurt veterans. As a disabled veteran, I have found as a result of the current administration efforts I have had easier access and more choices to care;
• I am sure the person who wrote the letter erroneously stating that the payroll tax cut would hurt seniors got his information from television, newspaper, radio and/or social media. Unfortunately, none of these resources are reliable anymore. Before accepting and believing so much of what is presented, a reliable source needs to be found, not a pundit bloviating, or an anonymous source or the statement that “it was reported” on a television show or newspaper.
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Albert Spencer is a resident of Kapa‘a.
