Press Releases

Trump’s Payroll Tax Deferral Is Fundamentally Corrupt, Disrespects Military Service Members, Civil Servants

Washington, September 11, 2020

Late last night President Trump made clear that his Executive Order allowing employers to defer payroll taxes until 2021 was intended as coercion, tweeting, “When we win I, as your President, will totally forgive ALL deferred payroll taxes with money from the General Fund.” The Constitution vests tax powers with Congress, meaning the President cannot deliver the political bribe he offered.

Trump’s order largely fizzled with the private sector, as business groups, large companies, and private payroll services swiftly rejected the deferral. The House of Representatives and some Republican Governors have also said they will not participate. The Trump Administration responded by forcing military service members and federal workers making less than $104,000 per year to have their payroll taxes deferred beginning next week, setting up millions to receive smaller paychecks after the election when the deferred taxes are reinstated and repaid.

In a clear demonstration of the confusion and inconvenience Trump’s payroll tax policy is inflicting on the military, Sergeant Major of the Army Michael Grinston, the highest ranking enlisted member of the Army, encouraged soldiers to “set the ‘extra money aside,’” which is exactly what military payroll providers did for soldiers until the Trump Administration ordered them to stop. Chief Master Sergeant JoAnne Bass, the highest ranking non-commissioned member of the U.S. Air Force, wrote that “unfortunately, neither military members nor civilian employees are eligible to opt-out of the deferral.”

Officers have expressed concerns that the deferrals “could be ruinous to [soldiers’] financial health.” Retired Army General Barry McCaffrey said military families will “get kicked in the chops when they get several months-worth of DOUBLE withholding.” Federal employee unions and civil servants have expressed similar concerns to our office.

“The President’s mandatory payroll tax deferrals show disrespect for America’s military and civil service, and Trump is making it clear that this is intended as a form of political blackmail,’ said Rep. Don Beyer (D-VA). “Trump’s openly corrupt message is, ‘vote for me and I will pay you, otherwise your paychecks will decrease in January.’ This is corruption as public policy, and both the Constitution and the law make it clear that Trump cannot do what he says. Congress should void this policy entirely, and as it explores means of doing so federal workers and military servicemembers should be allowed to opt out of the payroll tax deferral.”

Congress has expressed bicameral (and bipartisan) opposition to Trump’s payroll tax deferral, with the House seeing the introduction of legislation to cancel the order entirely.

Federal employees and military families, meanwhile, will need better communication from their agencies or service branches to fully understand and prepare for the reductions in their paychecks next year. As they attempt to make sense of the policy, here’s what they’re seeing:

Federal News Network: Federal employees can’t opt out of payroll tax deferral, agency says
The Hill: Trump payroll-tax deferral for federal workers sparks backlash
DCist: ‘We’re Being Used As Pawns’: Some Federal Workers Are Wary Of Trump’s Forced Deferral Of Payroll Taxes
Daily Caller: Donald Trump’s Payroll Tax Holiday Comes With A Major Catch
FoxBusiness: Military members unable to opt-out of Trump’s payroll tax deferral
Washington Post: The president’s payroll tax cut is really a loan that workers have to pay back. Let’s call it what it is.
Federal News Network: Non-negotiable: all military members will be subject to Trump’s payroll tax deferral
Military.com: Troops, DoD Civilians Won't Be Able to Opt Out of Payroll Tax Deferral Plan
Military Times: More than a million troops to get temporary pay hike with payroll tax deferral — but there’s a catch
Stars And Stripes: Military personnel can’t opt out of government’s payroll tax deferral
Task And Purpose: Your paycheck is about to get bigger, but the IRS is going to stick it to you next year
Marine Times: Trump promises to erase troops' 2021 deferred tax debt, but lawmakers say he can’t
Military.com: Trump Says Troops Won’t Have to Pay Back Deferred Payroll Taxes -- If He Wins
The Atlantic: Trump: Americans Who Died in War Are ‘Losers’ and ‘Suckers’