Dallas, TX asked in Tax Law for Colorado

Q: Is the payroll tax deferral constitutionally legal?

President wrote executive order for payroll tax deferral, with a payback date and no option out for military service members. Sounds like taxation without representation.

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1 Lawyer Answer
D. Mathew Blackburn
D. Mathew Blackburn
Answered
  • Licensed in Colorado

A: There is no constitutional requirement for representation prior to taxation. Washington D.C. residents have no representation and they still pay income tax. If you travel through a state that you don't reside in you are still subject to that's state's sales tax even though you have no representation. That concept is a misnomer and has no basis in law.

Whether the ex order is constitutional is a seperate issue. The initial issue is standing and damages. Who gets to sue over the constitutionality, the employer, the employee, someone else? Then we have to allege that the person was damaged. How has a delay in tax payments harmed you.

Someone will file and the courts will have to address these questions. My assumption is they will be looking to push this out past the repayment period and just let the matter become moot on its own.

The larger issue will be employer liability for taxes not withheld when there's a seperation of employment and the final paycheck does not cover the tax.

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