The White House wants the Treasury Department to ensure that companies, not workers, will be held liable for paying the employee portion of the payroll tax when President Trump’s tax holiday ends.
The Treasury Department has not been willing to issue such guidance, though it is unclear why. Businesses, which have been fielding questions from their employees about when the tax cuts will begin, would prefer that Congress legislate any changes to tax policy. It is also not clear that the White House would have the legal authority to shift the tax burden in such a manner.
The president’s executive order suspends payments, but employees will be on the hook to pay the deferred taxes back when the tax holiday ends. Many companies are expected to opt out of participating to avoid sticking their employees with a giant bill next year.
The dispute between the White House and the Treasury Department over the guidance was reported earlier by Bloomberg News. A department spokeswoman declined to comment. Judd Deere, a White House spokesman, did not dispute that the Trump administration wanted companies to be liable for the tax but said he would not comment on internal policy deliberations.
The payroll tax suspension plan has been fraught from the beginning. Treasury Secretary Steven Mnuchin was skeptical of the idea and has said participation would be optional. Mr. Trump has said that he will push Congress to make the tax deferral permanent if he is re-elected, but if Democrats retain control of the House of Representatives, more tax cuts are unlikely.