Is 7.65% of your income too much to pay ?

[kentuck]

For the financial and medical security of our old folks? Does that seem like an extraordinarily high amount of taxes to pay for such a high reward?

Would you be willing to pay more?

That is presently, before Obama's FICA taxcut takes effect, the Social Security and Medicare taxes that are paid by each worker in America. Of course, his employer is required to put in a similar amount. Is that such a drag on our economy? It seems like a grand bargain to me?

I do not believe people thoroughly understand what they get for such a small percentage of their paychecks? And it is not going bankrupt. It is not a Ponzi scheme. That money pays for the security of our folks and the medical needs as provided by Medicare. No where in the private health industry will they get such a great deal.

http://ssa-custhelp.ssa.gov/app/answers/detail/a_id/240/~/2011-social-security-tax-rate-and-maximum-taxable-earnings

(edited for link)

[kentuck]

1. I guess somebody disagrees?

They unrecced it. Maybe they just don't like me? :-)

[dionysus]

2. unrec for complaining about unrecs.

:hi:

[kentuck]

3. That's alright!

:hi:

[Name removed]

6. Deleted message

Message removed by moderator. Click here to review the message board rules.

[dionysus]

7. oh my.

[Creideiki]

9. It's okay. Your opposition to the Democratic Administration is noted.

Not surprising. Just noted again.

[dionysus]

18. rather weak attempt to put words in my mouth, don't you think?

[TBF]

23. that's awesome cuz we don't have nearly enough net nannies

:freak:

[Abq_Sarah]

4. 15.3%

Your employer isn't paying half as a gift to you. It's figured as part of your wages.

[kentuck]

10. Sure ...

They would pay you that amount if they were not paying it to Uncle Sam. That money is never added to your wages and you never see it.

[Abq_Sarah]

34. My employees know

The exact breakdown between what they earn and what it costs me to employ them.

At the end of every year, they get a detailed accounting that shows their "take home" pay, what they paid in federal taxes, FICA and state taxes. I also include what I paid on their behalf in FICA, unemployment, workers comp, etc... I total it all up so they can see the difference between what they receive vs what I actually pay to employ them. If I were not sending that money to the fed, the state and insurance companies, I'd make damned sure it ended up in my employees check because I'd personally like to see them take home more money, not less.

[unblock]

11. per classical economics, the cost of a tax is shared between the buyer and seller

in the case of payroll taxes, the 15.3% combined tax is shared between employer and employee. yes, the employer figures their 7.65% on top of your nominal wages as your total cost (along with benefits and a share of overhead and so on), but they also recognize that only your nominal wages MINUS all taxes (including the employee's 7.65%) reaches you, so they reality is that they have to pay the employee something higher than they otherwise would have in the absence of the employee's 7.65%.

now, simply economics doesn't tell you that the combined 15.3% is necessarily shared 50-50, and surely it's not; but it's certainly not borne 100% by one side, either.

[ThomWV]

25. Ultimately ever single penny of comes from the effort of Labor!

In the end it is the labor of the employees that pays all the bills, it is not the owner's, or sellers, or buyers - its the people who took raw materials and turned them into finished good. It is the work of the sales force, that took those finished good and found a market for them, exerting much labor in doing so as well.

[Broderick]

12. A hidden tax in my opinion

Employees never realize that it is being paid by the employer, but it is really the employee that is paying it. Meanwhile, the owners are going to get more tax breaks.

[kentuck]

14. I'd rather look at it as everyone pays 7.65%....

including your employer. Why should he pay nothing?

[Broderick]

15. I agree one hundred percent

But, the reality is that the employer discounts wages by that amount and really the employee is paying 15 plus percent. If someone is making 10.00 an hour, the 7.65 percent comes out of that 10.00 per hour on the employees' check. But in reality the employer is looking at it like he is paying someone 10.77 an hour. It might be good in a way, because if you doubled the amount of deduction and really paid the 10.77, many employees might get up in arms. Any wage tax an employer pays, is really paid by the employee one way or another any way you look at it.

[kentuck]

16. That assumes the employer would pay that extra .77 cents to the employee...

From my experiences, he would not. It is irrelevant to the employee.

[Broderick]

17. Isn't that the truth!

[exboyfil]

5. Actually double it (or perhaps 1.5)

since the employer portion does force your wages down some. The thing I resent is the cap given how little incomes between $50K-$107K benefit from S.S. (at that range and probably even a little lower those incomes are subsidizing it). Why should your obligation to the elderly and lower earners stop at $107K? I could go with a smaller withholding percentage over the cap to reflect the high earners are getting nothing for their additional contributions.

Another thing I resent are moderately high income earners that can avoid paying into system for the majority of their career, and then get a boost by paying in for their last ten years (or some combination).

I am alarmed by the desire to expand the program to additional lower earners because it will put further strain on the system (ie low income immigrants). Not a popular stand on this board, but should be in any discussion regarding immigration. Right now I do not like the fact that undocumented workers pay into the system, but on the other hand I prefer that those dollars not be used to calculate benefits (trying to sort out the fraud would be a nightmare and you are back to calculating very high benefits for those contributions).

Remember 90%/32%/15% those are the percentages used in the formula to calculate your benefits.

As far as being a small percentage of their paycheck. I pay more in Social Security than I do in Federal income tax (most people do actually). I do not consider it small. It is a hell of lot of money when Congress fails to recognize that I have loaned it to them (building the Trust Fund), and they refuse to pay it back.

Social Security does a lot of different things, and I think its complexity is something of a drawback. I would like to see it taught in math class (probably Algebra II and Consumer Math) along with the understanding of what happens when you are injured (you get disability benefits from S.S.), you die (your surviving children get survivors benefits - essentially a term life policy), and the value of an inflation adjusted pension when you retire.

[Creideiki]

8. So raising the cap would have the highly desirable side-effect of lowering CEO wages?

Now to find a way to reschedule some forms of capital gains to earned wages and start taking the 15.3% from the financial leeches on society.

[exboyfil]

13. Maybe not CEOs but higher level managers

Yes I think over time businesses will restructure their wage/benefits packages to reflect the extra cost. They have to. CEOs are different because their salaries are set by folks who do not adequately participate in the process (mutual fund managers for example). In fact I think they forego their fudiciary duty to question whether compensation packages make sense for their shareholders.

[dana_b]

19. I'd be willing to pay more if

we could open up Medicare for all. Also to ensure that my grandkids will get the same SS benefits that my grandparents did.

[sinkingfeeling]

20. I'm willing to pay another 15% for full public options.

[kentuck]

21. Even that would be a bargain...

But we could cover everyone with good medical care and social security with only one or two percent more. It is not an extravagant amount. Our people deserve it, no matter what the Republicans might say.

[Broderick]

22. Single payer health insurance

And safety nets for ALL AMERICANS!

This is Democratic Ideals! but, we have been co-opted by the Corporate masters that bilk and control the politicians.

[RebelOne]

24. I paid into Social Security for over 50 years

and am now reaping the benefits of all that money I paid in with my small pittance monthly payment. But I deserve it, And yes, it is an entitlement. I am entitled to that money.

[dtexdem]

26. I'd be willing to pay more, but ...

first I want to see the rate applied to all income, not excluding income over $106,000, like happens now.

[kentuck]

27. I think the argument that could be made to include all income ...

...is that we all have a responsibility to take care of our elderly and to make sure they have medical care when it is needed. That is part of the fabric of a great nation. It is our contribution to society and it is only fair that we all pay the same percentage. There should be no cut-off at $106,000...

[Warpy]

28. It's 15.3%, which is your cost as an employee

Were there no Social Security, you'd see it all in a paycheck.

While that might sound good, it's really a very bad deal for all of us since that money is an insurance premium that insures you from starving to death on the street when you're too old and/or too sick to work. It also insures your children against going hungry if you die while they are young.

The problem is that the percentage is too high and has been since Ronald Reagan raised it six times so Congress could rob it to disguise what his tax cuts to his rich friends cost the government. It was a back door tax increase with no deductions on those least able to pay: working people and disproportionately small, labor intensive businesses.

Reaganism needs to be rolled back and that has to start with the most unfair tax of all, the doubling of the payroll tax on working people. If there is a shortfall, it needs to be compensated for the way it was supposed to be, by a rise in the laughably low cap on taxable income.

This is just the first step in shifting the tax burden where it belongs, onto the shoulders of those who can not only afford it, but those who are deriving the most benefit from living in a safe country protected by a bloated military.

[kentuck]

30. It could be argued that the employer would pay you 7.65 % more but...

wages have been declining for 30 years. The 7.65%, if it was added to the average paycheck, would nowhere make up for where the wages would have been if the employers had been fair with the rewards of productivity. They hold it back one way or the other and the employee does not see it. There is no evidence wages would be one cent higher if the employee paid the full 15.3%...

[AngryAmish]

29. 15.3% - for us self employed

5% Illinois tax
28% everything over 139k (and up to 35%)

48.3% tax rate for us self employed.

Right now self employment tax dies at about 110k.

[kentuck]

31. I don't think that is fair...

No one should be paying more than 7.65%. Just my opinion.

[AngryAmish]

32. Everyone is paying 15.3%

Half of the 7.65% is just invisibile.

[kentuck]

33. Everyone is paying 7.65%...

including the employers. There is no evidence that would be added to employees paycheck if employers did not pay it. They would find another area to make up for the 7.65%, as they are doing at present, with less in pay increases or less in benefits to their employees.