Tax holiday for Social Security and Medicare taxes is a bad idea
Dan Caplinger
May 9, 2020 at 1:01PM
... payroll tax elimination doesn't target relief where it's most needed. For the more than 30 million former workers who've filed first-time claims for unemployment benefits over the past couple of months, a payroll tax holiday would have zero direct impact on their financial situation, because they have no income on which to pay payroll taxes. Even for those who've managed to keep their jobs, the tax cut disproportionately helps higher-income earners over lower-income earners. If a package included employer payroll tax relief, then it too would benefit large businesses more than small businesses, simply by virtue of the size of their respective workforces.
... failing to collect payroll taxes leaves Social Security and Medicare with less funding at a time when they're already facing financial challenges. Projections show the trust funds supporting Social Security are likely to run out of money by the mid-2030s, leaving a shortfall in benefit payments from then on. The White House hasn't given any sign that it would make up for lost payroll tax revenue by depositing money from the general budget into the trust funds ...
https://www.fool.com/taxes/2020/05/09/trumps-payroll-tax-cut-could-save-me-21000-its-sti.aspx
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