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INTERESTING STUFF – 5 September 2020

Social Security Payroll Tax Deferral and The Alex and Ronni Show

Perhaps you have seen the news that President Donald Trump declared a Social Security payroll tax deferral through the end of 2020. It went into effect on 1 September which means the 6.2 percent of your pay that is normally withheld will show up in your paycheck.

However, that doesn't mean it is free money. You will be required to pay it back beginning 1 January 2021 when twice the 6.2 percent will be withheld to reimburse Social Security.

The employer half of the withholding remains in effect.

Of course, it is not as simple as I have explained. You see, participation is up to employers, many of whom have complained that it is too complicated to rearrange their systems for the deferral. Some others say they will delay implementing the deferral to take time to ask employees if they want to participate.

This causes additional difficulties, as CNBC explained:

”While it may be easy for a small shop with five employees to determine whether workers would be onboard with a deferral, larger firms with thousands of employees may ask each one whether they want to participate.

“In that sense, it may be easier for larger firms to either skip the deferral altogether or default all workers into it — as opposed to asking each employee what they want to do.”

Federal workers have no choice – they will have their payroll tax deferred.

As CNBC further points out, it would be wise for employees who opt in or whose employers do, to stash away the extra money so that the double-dipping to pay it back in January won't hurt so much.

In that case, obviously, the deferral makes no difference to employees, and it is, of course, useless to the 30-odd million unemployed Americans.

Which leaves one wondering what in the world the president was thinking when he dreamed up the deferral. Some fear his goal is to kill Social Security and according to Nancy Altman, that would be easier than you might think.

Altman, who has a 40-year background in the areas of Social Security and private pensions, is president of Social Security Works and Chair of the Strengthen Social Security coalition and campaign, explains in a 1 September 2020 CNN piece how that could happen:

”According to estimates from the independent chief actuary of the Social Security Administration, if all Social Security contributions from payroll tax stopped on Jan. 1, 2021, the nearly 10 million people today getting Social Security Disability Insurance benefits, which averages about $1,125 every month, would see them stop abruptly in the middle of 2021.

“Those 55 million receiving Social Security Old-Age and Survivors Insurance benefits, which average around $1,440 a month, would see them disappear two years later. Social Security would be without money to pay benefits by 2023 (Congress could only stop Trump by enacting veto-proof legislation, a highly unlikely proposition).

“Section 7508A of the Internal Revenue Code allows deferrals for up to one year, long enough to stop the disability insurance payments.

“Killing off the rest of Social Security takes two years longer, but a newly elected President Trump could interpret the statute to permit an additional 12-month deferral with the declaration of a new disaster.

“All benefits could be stopped with just two new disaster declarations. Concerningly, the Supreme Court has found that President Trump has 'broad discretion' in making findings.”

This is terrifying.

THE ALEX AND RONNI SHOW
My former husband, Alex Bennett, and I sat down for another cyber-chat from opposite ends of the country. Of course, Trump came up but we also discussed house cleaning, the virus, magic mushrooms and more.

You can check out Alex's online talk show here.

Comments

It is beyond my meager comprehension how so many Trump-supporters can vote so clearly AGAINST their own self interest...Against Social Security, against healthcare, etc. Are they that racist? That deluded? That morally bankrupt? That blinded and frightened by Fox “News”? I don’t get it.

I got a notice from my investment manager that the required yearly disbursement will be deferred until 2022 at which time they'll take two years out at the same time. I don't like or trust the games the Trump administration are playing with our money.

You explain this simply and terrifyingly. This should be sent to every letter to the editor in Florida—actually, every swing state. Trumpets don’t watch CNN. Maybe that specter of SS being cut off will scare them into their right minds.

I asked our accounting manager if our company of 100 employees, in 3 Eastern states, was going to participate. The reply:

Unfortunately there hasn’t been much guidance from the IRS on this new program. Based on how poorly the employer tax deferral from the CARES Act has been handled and the confusion about the tax credit from the FFCRA, our payroll provider is strongly encouraging clients to not take part in this latest program.

We found that the time and resources required to implement this program on a weekly basis from now until the end of the year greatly outweigh the immediate benefit for both employee and employer. For this reason[we have] opted out of this program.

Ronni, thanks for explaining Trump’s “payroll deferral” that apparently is both dangerous as it is nonsensical. I’m so sick & tired of this white trash lunatic. Everything that Patty-in-New-York said... ditto.

Enjoyed the Alex & Ronni Show, while it didn’t exactly have the “warm n’ fuzzy” of your last show, you were your old self again, sharp as a tack and just the way we like you best. :-)

I'm glad you have somebody to do the cleaning stuff for you..........you definitely
have better things to do. Okay, I admit it, it's gotten to the point that when I read, or even start to read about what Trump's going to destroy next, I freak out and drop out. I'm doing what I can do for Biden, punto. I used to schedule my dinner time around being sure I watched a full hour of news. I. Just. Can't. I watch some, sometimes all, often none. The daughter of a newspaper man, I used to read the Times and a Boston newspaper every day. No way now! A friend recently said I was "neglectful" not to know all the gorey daily details. Hmmmmm. He's a dear friend, but he ain't DOing shit about it. Oh, don't listen to me. Thank heavens there are clear eyed people like you Ronnie, who can understand and pass on the word in clear, understandable language!

The whole phenomenon of the would-be Emperor of tRumpystan is terrifying! How did we EVER allow ourselves to get to this place? Even if tRump wins this year (perish forbid!), destruction of Social Security in 2023 would plunge millions of older Americans into immediate poverty. I'm not sure that even he would view that as a winning plan for a 3rd term (OMG!) or for his anointed candidate in 2024 (Ivanka?). On the other hand, tRump isn't known for thinking further ahead than his next tweetstorm.

IMO, Patty-in-New-York has a pretty good read on it, starting with basic fear/loathing by some (too many?) Americans of anyone and anything perceived as the "other". Even if Biden wins in November--and I URGENTLY hope he does!--it will take time and effort to extricate ourselves and our country from the tRumpeteers.

I'm with Salinda. I just can't watch Trump's shitshow on a daily basis anymore. It's overwhelming.

From law and disorder to insulting those who served and died, to thugs on an airplane, it is a daily barrage.

I have donated to the Biden campaign, have applied to be a poll worker if the virus is controlled in my community by November, have a banner in my window, and am writing postcards to remind folks to vote.

What else can we do?

When it's time to pay back the deferred money, it will be characterized as a "tax increase."

The only reason Trump is doing this to SS is because once it dies in 2023 he will no longer be required to pay his share of SS taxes for his employees.

I'm not surprised to hear that the other tax deferral schemes of the CARES Act have not been well planned or implemented. My husband receives medical care from the VA, including prescription drugs, for which he has always had a monthly co-pay. A few months ago I realized that we were not receiving monthly invoices for these co-pays any longer. I went online and tried to find information about this on a couple of the sites connected to ordering the RX and paying the co-pay and found nothing. The next day my husband called someone at the VA clinic that manages his prescriptions and was really not able to obtain any explanation other than that the co-pays had been either discontinued or deferred (not sure whether they're not being charged or just not invoiced) during the pandemic. The woman with whom we spoke, who manages the entire pharmacy at the clinic we visit, could not tell us whether the charges would just accrue and we would be billed at some future point, and if so, whether we would have to pay the entire amount at once, or over time. These are large amounts of money for many veterans!! I could not believe that we could not get more definitive answers, but the person with whom we spoke did not seem to know any details, because there are none. She was able to tell us that the co-pays would be deferred at least through January. That conveniently overlaps with the election, not that the current president is using that to influence voters or anything. I need to call our Congressional representative and senators and follow up for more information, but I suspect that they may not know any more either. I keep having visions of the return of poor farms in our future.

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