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Trump’s Payroll Tax Action Creates Political, Business Risks

  • A permanent cut would raise Social Security funding questions
  • Politicians have messed with the ‘third rail’ at their peril
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Watch: President Donald Trump announced four executive actions on Saturday, including a temporary payroll tax deferral for some workers and continued expanded unemployment benefits, as the coronavirus pandemic continues to hobble the U.S. economy. (Source: Bloomberg)

President Donald Trump’s move to halt the collection of taxes that fund America’s main support programs for the elderly spurred a wave of political opposition and threatens to generate tension between employers and workers.

Trump in a memorandum on Saturday instructed the deferral of payroll tax collections for some workers. The taxes are paid by both employees and their employers, and fund Social Security and Medicare for those already using those programs.