August 25, 2020/Media

REPORT: Tillis-Backed Tax Cut Will Deplete Social Security in Three Years

A new government analysis estimates that the Tillis-backed plan by the Trump administration to end payroll taxes would cause the Social Security trust fund to “become permanently depleted” by 2023, “with no ability to pay… benefits thereafter,” leaving North Carolina seniors and hardworking families out to dry.

The letter from the Social Security Administration’s Chief Actuary found that funding for disability insurance would become permanently depleted in the middle of 2021, and that Social Security funding “would become permanently depleted by the middle of calendar year 2023, with no ability to pay OASI benefits thereafter.” The effect would be catastrophic on North Carolinian seniors and working families who depend on Social Security for their retirement.

Senator Tillis has thrown his support behind the Trump administration’s unpopular plan even though the plan “would do nothing to help the millions of Americans out of work because of the coronavirus pandemic and not getting paychecks.” Tillis’ support is the latest in his long history attacking North Carolinians’ earned benefits. Tillis previously suggested paying for corporate tax cuts by cutting programs like Social Security and Medicare and threatened that young people “may have to wait 6 to 8 months longer” to receive benefits.

“This new report confirms that Social Security, Medicare, and other earned benefits North Carolinians depend on are on the ballot this November,” NCDP spokesperson Robert Howard said. “Senator Tillis rubberstamped President Trump’s order even though it offers no relief to North Carolinians out of work, yet now we know it will have catastrophic effects on North Carolinians’ retirement security. For many North Carolina families, their retirement won’t be safe until Senator Tillis is out of office.”


CNN: Eliminating payroll tax could deplete Social Security by 2023, chief actuary warns
By Katie Lobosco
August 24, 2020

Key Points:

  • Eliminating the payroll tax could deplete the Social Security trust fund within three years if there’s no alternative source of revenue, according to the agency’s chief actuary.
  • It would do nothing to help the millions of Americans out of work because of the coronavirus pandemic and not getting paychecks.
  • Trump has long been a fan of the payroll tax cut. On August 8, he went around Congress and signed an executive action that calls for deferring the payroll taxes paid by employees until the end of the year. But because it’s a deferral instead of a cut, workers could then face a bigger tax bill next year.
  • It may have little impact. Employers have the option of withholding the tax, and many say it would be “unworkable” to do so.
  • The pandemic has already put Social Security on shakier ground because the millions of people out of work aren’t paying payroll taxes to begin with.