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Have recent payroll tax cuts impacted the finances of the Social Security program?

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Recent payroll tax cuts have had no impact on Social Security's finances because the laws that enacted them required that monies "equal to" the decreased payroll taxes be "transferred from the general fund" of the U.S. Treasury to the Social Security program. The law further specifies that these transfers be made "at such times and in such manner as to replicate" Social Security's revenues as though the payroll tax cut had "not been enacted." In spite of this fact, NPR and other media outlets reported that these cuts "reduced Social Security's revenues." In reality, such laws transferred wealth from the highest-earning households to others because the wealthy pay a disproportionate amount of general fund taxes.

DocumentationPayroll Tax CutsGeneral Fund Taxes



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