A Second Stimulus Package Will Almost Certainly Hurt Social Security for This Reason
For months, lawmakers have been debating what a second COVID-19 relief package should look like. The first relief package, the CARES Act, was put into place quickly, and it allowed for key benefits like boosted unemployment and direct stimulus checks of up to $1,200 per eligible adult recipient. But lawmakers have been slower to act on a second relief deal, largely because there's been a question as to whether boosted unemployment and additional stimulus checks are actually necessary.
At this stage of the game, though, it's clear that some type of additional relief is in order. The COVID-19 crisis has not improved during the warmer weather months, as many hoped it would. If anything, it's gotten worse, with record numbers of daily cases being logged in July. As such, lawmakers will be reconvening in the Senate to hammer out a second stimulus package. But if President Trump gets his way, that package will include one key feature that might benefit workers and employers in the short term, but hurt Social Security in the long term.
President Trump has made it clear that he wants some type of payroll tax break to be included in the next stimulus deal. Right now, workers are on the hook for a 12.4% payroll tax for Social Security purposes on their first $137,700 of income. For salaried workers, that tax is split evenly between employee and employer. Self-employed individuals, meanwhile, pay that entire 12.4%.
Source Fool.com
