And they’re off — to getting a temporary bump in their take-home pay.
The Nassau County Off-Tracking Betting Corporation has taken up President Trump’s call and is giving workers a pause in paying the 6.2 percent payroll tax, which funds Social Security.
The move will provide OTB employees more take-home pay in the short term during the COVID-19 pandemic — but they could see less weekly money in early 2021 as they pay back the tax, unless Congress decides to finance the revenue loss, which is very questionable.
Many businesses have declined to implement the payroll tax holiday despite Trump’s Aug. 8 executive order urging the action because of the potential higher tax liability for workers down the road.
The decision by Nassau OTB to embrace the temporary payroll tax relief will certainly raise eyebrows because the county-run bookie’s president, Joseph Cairo, is also chairman of the Nassau County Republican Party.
“It’s just a gimmick because you have to pay the money back,” said OTB cashier Jackson Leeds, who opposes the change.
“And it’s political because Cairo is chairman of the Nassau County Republican Party,” he added.
The Nassau OTB Management’s Sept 1 memo to workers says: “Please be advised that the ‘take home pay’ on your paycheck from now through December 31, 2020 will be higher than usual. This is because President Trump by memorandum of Aug. 8, 2020 has authorized employers to temporarily defer collection of your Social Security payroll tax (6.2%).
“The amounts may eventually be forgiven by Congress but at this time is a deferral only, and should be viewed as a short term interest free loan that must be repaid…Please be aware that this means that the `take home pay’ in your January-April 2021 paychecks will be lower than you currently receive because the regular social security amount will be deducted as well as the payback amount,” the Nassau OTB notice to workers said.
A rep for Nassau OTB, former Sen. Al D’Amato, defended the tax deferral as a good stimulus for the betting agency and its workforce.
“It makes sense. You’re paying people more and you’re not laying off workers,” said D’Amato, whose Park Strategies lobbying firm represents Nassau OTB as a client.
But the US Chamber of Commerce told the White House and congressional leaders last month that many of the nation’s major industries would decline to implement the president’s order to pause collecting the 6.2 percent payroll tax without a subsidy from Congress.
“Under current law, the EO [executive order] creates a substantial tax liability for employees at the end of the deferral period. Without Congressional action to forgive this liability, it threatens to impose serious hardships on employees who will face a large tax bill as a result of deferral,” the chamber said in an Aug. 18 letter to Treasury Secretary Steven Mnuchin, House Speaker Nancy Pelosi (D-Calif.) and Senate Majority Leader Mitch McConnell (R-Ky.).
“If this were a suspension of the payroll tax so that employees were not forced to pay it back later, implementation would be less challenging. But under a simple deferral, employees would be stuck with a large tax bill in 2021. Many of our members consider it unfair to employees to make a decision that would force a big tax bill on them next year,” the chamber said.
“It would also be unworkable to implement a system where employees make this decision. Therefore, many of our members will likely decline to implement deferral, choosing instead to continue to withhold and remit to the government the payroll taxes required by law. We hope Congress and the Administration come together on a path that supports workers instead of burdening hardworking Americans with a large tax bill next year.”
A spokesman for Nassau OTB said it was the management’s decision to suspend collection of the payroll tax cut after consulting with workers.