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A Degree in Economics is not needed to be able to see the flaws in Trump’s Payroll Tax Plan.
First ask the question Why the deferral of Payroll Tax might be of immediate Benefit to Workers? It is fairly obvious they could use some more spending money right now.
On the assumption that workers will spend the money that they will then owe the Government – as the Trump Plan is the money be paid back – if you spend the money your debt burden increases. Workers are likely to find themselves in an even bigger financial hole down the road.
Is that the idea behind Trump’s Plan? Or, is the not so Hidden Agenda really the intention to make the temporary deferral become a tax cut – and not to impoverish American families with further debt?
If the deferred Payroll Tax is not repaid but is converted in to a Tax Cut – what then happens to the Social Security Trust Fund which pays Benefits – whose budget is based on Payroll Tax Receipts?
It appears that Trump has bought himself and the rest of America a Balloon – squeeze it on one end and it bubbles out at the other. There is little wisdom in the Payroll Tax Plan of Pres.Trump irrespective of whether it remains as just a deferral or becomes a Tax Cut.
Jeopardizing the solvency of Social Security with the likelihood the capacity to continue benefits at present levels makes it imperative that Workers do not squander the money they receive from Payroll Tax – deferral or tax cuts. That money is Your Retirement Money.
Therefore put it in to your Retirement Fund – where it belongs, to ensure that it will be there when you retire.
Note: 401Klever.com Retirement Plan Revisions encompass this move as the Economic Policy Change removed part of the Payroll Tax Savings included in the initial program – which should now be reinstated, requiring your own actions for balancing disposable income with 401k contributions