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In reply to the discussion: The payroll "tax" is not really a tax... [View all]blcartwright
(12 posts)41. no - it's determined by how much you earned
http://www.ssa.gov/oact/progdata/retirebenefit1.html
There is a close relationship between earnings and contributions, but they are not the same. That past earnings are indexed to inflation and that the "contribution" percentage may have changed over the years are things that make earnings and contributions different.
http://www.taxpolicycenter.org/taxfacts/content/pdf/ssrate_historical.pdf
The current combined employer & employee rate of 12.4% has been in effect since 1990. From 1974-79 it was 9.9%. That a worker retiring today paid in at lower rate prior to 1990 is not considered, it's the inflation adjusted earnings during those years.
There is no personal FICA fund. Money you pay in today goes out to someone else at the end of the month.
There is a close relationship between earnings and contributions, but they are not the same. That past earnings are indexed to inflation and that the "contribution" percentage may have changed over the years are things that make earnings and contributions different.
http://www.taxpolicycenter.org/taxfacts/content/pdf/ssrate_historical.pdf
The current combined employer & employee rate of 12.4% has been in effect since 1990. From 1974-79 it was 9.9%. That a worker retiring today paid in at lower rate prior to 1990 is not considered, it's the inflation adjusted earnings during those years.
There is no personal FICA fund. Money you pay in today goes out to someone else at the end of the month.
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The media and pols do a disservice by not explaining this. They want to make it sound like Obama
kelliekat44
Jan 2013
#1
If you want SS to provide a decent standard of living you need to advocate to increase the tax.
dkf
Jan 2013
#2
but you don't know that each and every worker in the 1930s were doing this, do you?
CTyankee
Jan 2013
#29
Small Business Owners and Freelancers have been paying 13% to 15%, and we have to pay more?
AZ Progressive
Jan 2013
#44
To me the FICA tax makes the idea of Social Security as a persons contribution...
WCGreen
Jan 2013
#10
You say, "We can all quibble ..." No. We can't. I'm not quibbling with you.
AnotherMcIntosh
Jan 2013
#15
It's only looked at as a tax because it is tied to the amount you earn and is a mandatory
WCGreen
Jan 2013
#18
The irony is that most people did not even notice they got the "tax cut" but....
kentuck
Jan 2013
#12
Payroll taxes, imo, are taxes subject to income taxes if, and when, politicians are willing
indepat
Jan 2013
#21
Everything you said is true and accurate and I'm surprised there aren't more recs.
Poll_Blind
Jan 2013
#22
You realize FICA tax rate has been raised a few times before right? It hasn't
SWTORFanatic
Jan 2013
#32