TAX PLEDGE
DONALD Trump has promised to scrap the payroll tax if he is reelected and said it could save families up to $5,000 a year.
"We will be terminating the payroll tax after I hopefully get elected," the president said on Wednesday.
Click here for the latest news on Donald Trump
2
However, Trump insisted: "We're not going to touch Social Security."
He later confirmed that Social Security will be paid into "through the general fund."
"What we'll be doing if we do that, we'll get it approved by Congress and take the money from other places other than Social Security.
"We will not take it from Social Security in any way, shape or form."
When quizzed by reporters at the White House, the president continued: "It's both a company cut and an employee cut.
"It very much incentivizes people to go back to work and work hard and the company to hire people back.
2
"We've had some of the economic minds say that's the most important cut, the best cut you could do."
Just days earlier, on Saturday, Trump ordered calls for a deferral of payroll tax, federal student loan payments, and efforts to halt evictions.
Trump said the employee portion of the payroll tax would be deferred from August 1 through the end of the year.
The move would not directly aid unemployed workers, who do not pay the tax when they are jobless, and employees would need to repay the federal government eventually without an act of Congress.
What is payroll tax?
The payroll tax is an amount of money withheld from an employee's paycheck by its employer who sends it to the government on their behalf. The tax is based on wages, salaries and tips. The taxes are deducted directly from the workers earnings and paid directly to the Internal Revenue Service (IRS). The payroll tax is divided into three main categories: Federal income, Medicare and Social Security. However, the government also collects money for federal unemployment programs.
In essence, the deferral is an interest-free loan that would have to be repaid.
Trump said he will try to get lawmakers to extend it, and the timing would line up with a post-election lame-duck session in which Congress will try to pass government funding bills.
"If I win, I may extend and terminate," Trump said, repeating a longtime goal but remaining silent on how he would fund the Medicare and Social Security benefits that the seven per cent tax on employee income covers.
Most read in News
Employers also pay 7.65 per cent of their payrolls into the funds.
In a letter to Treasury Secretary Steve Mnuchin, the Chamber of Commerce expressed its "serious concerns" with deferring the tax on Wednesday.
The Chamber believes that the Executive Order "gives rise to significant questions about implementation," including how it will affect those receiving fluctuating salaries and bonuses.