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Do Not Support AARP Payroll Tax Cut Campaign

Posted on January 22nd, 2009 by Iwaller

The AARP is leading an all out email effort requesting seniors and boomers support AARP political agenda of asking Congress to cut payroll taxes on people who are currently working.  I oppose this effort for two reasons and I contacted AARP to present my position. While on the face of AARP’s proposal, cutting payroll taxes could give some individuals temporary tax relief by not withholding taxes for paychecks given by their employers.  However, these taxes will still need to be paid to the IRS at the end of the year.   The short-sightedness of AARP’s effort will ultimately require people to pay a lump sum tax bill when taxes are due the following April.  Payroll taxes typically include IRS withholding, Social Security and Medicare taxes.

It is true many seniors and boomers who are employed may not have to pay much in taxes due to lower annual salaries, itemization of deductions, etc.  But for those seniors who will be paying taxes, a onetime cumulative 12 month tax bill could be overwhelming financially.

Secondly, cutting payroll taxes would only be a detriment to the U.S. economy and treasury.  It is these very same withholding taxes that help to pay for Medicare, Medicaid and Social Security. 

AARP would serve seniors, boomers and all Americans better if they would be proactive with the new Administration in demanding the tax cuts initiated by the Bush Administration for the wealthiest Americans, are rolled back.  Additionally, AARP should lead an effort to demand tax loop holes for large U.S. Corporations are eliminated and U.S. Corporations who located overseas in order to avoid paying taxes should be fined and penalized.

I am an AARP member and I do support many of the initiatives of this organization, but many times I do not as AARP makes campaign decisions on some issues that actually could hurt seniors and boomers.

Please consider carefully the long term implications before contacting your Congressional Representatives requesting they eliminated payroll taxes.

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Filed under: Senior Finances and Economy

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