. . .It is worth noting that most Americans in this income range pay more in payroll taxes than income taxes—payroll taxes fund Social Security and Medicare. When Lutnick speaks of eliminating “taxes” on individuals making less than $150,000, one must assume then that this includes both income taxes and payroll taxes, as the latter is the larger burden on individuals in that income range.

Lutnick, speaking to CBS News, reflected on his view of President Trump’s end policy goal, stating “I know what his goal is, no tax for anybody who makes less than $150,000 a year. That’s his goal, that’s what I’m working for.” It would make little sense to assume in his broad pronouncement of an elimination of “taxes,” Lutnick means only the lesser-burden of the federal income tax.

You Can’t Fund Social Security and Medicare Without Taxpayers
If the Trump administration truly intends to eliminate both income and payroll taxes from those earning under $150,000 and extend the TCJA tax cuts—we will be facing an existential crisis for the programs that working and retired Americans rely on.

In 2023 alone, payroll taxes generated $1.23 trillion, accounting for roughly 90% of Social Security’s revenue and a significant portion of Medicare’s funding. The entire system is predicated on there being workers paying in, so that retirees and the disabled can get paid out. Benefits do not continue in the absence of ongoing payroll taxes. Put differently, if you exempt enough income brackets from payroll taxes, you functionally deprive these programs of funding entirely.

. . .

The math is simple: if no one is paying in, no one gets benefits out. And that’s the part Trump’s allies don’t want to say out loud.