Halt payroll tax holiday

Every pay period employers are required to deduct from their employees’ paychecks money that is administered by the Treasury Department. This money is deposited into two accounts, the IRS and the Social Security. The treasury receives checks for each account and the funds cannot be intermingled.

The president and Congress through the budgetary process reviews the income and projected expenses that is collected by the IRS. When the expenses are greater than income, the treasury must borrow money with the issuance of bonds. Since the mid-1960s, the Treasury Department has used the Social Security Trust Fund to balance the budget.

Last year, President Obama, in trying to stimulate the economy, approved the current temporary payroll tax holiday, which will expire at the end of this year. The payroll tax holiday did not affect the receipts of the IRS but Social Security. Obama wants the holiday to continue to extend the $20 per week the taxpayers received and Rep. Nancy Pelosi claims that more than 250,000 jobs will be lost without the extension.

This is a Social Security tax holiday, not an IRS holiday. President Obama wants the wealthy to pay for the shortfall in Social Security with an income tax increase. This cannot happen because income tax is deposited with the IRS, not Social Security. The payroll tax holiday must not be renewed because the Social Security Trust Fund is being depleted faster than anticipated and it cannot absorb any more loss in income.

Jack McCabe

Batavia