In an August 8 memorandum, the Trump administration, in an attempt by the administration to stimulate the economy and ease the financial hardships of citizens caused by the coronavirus pandemic, announced the initiation of a Social Security Tax deferral from mid-September through December.
The payroll tax deferral will be effective for civilian federal employees at the pay period ending Sept. 12, the Defense Finance and Accounting Service (DFAS) said. It will take effect for all military personnel who earn less than $8,666.66 a month and for federal civilian employees who earn less than $4,000 per pay period. The 6.2 percent tax on gross wages goes into funding Social Security. So, military troops who are paid bi-monthly will see an increase in their pay that will hit the banks on September 15.
But the rose has its thorns.
There are two things wrong with this plan. Firstly, the tax is not permanently forgiven, (deferred): Beginning in January, troops will have to pay it all back over a four-month period. Secondly, and worse, if the taxes are permanently forgiven as some lawmakers are discussing, this will rob the Social Security system, on which millions of Americans already depend, from funds. The system has been bled dry from decades of Congress “borrowing” from it to pay for pork projects.