no, your boss does NOT pay "half of it". That's a load of crupola. Your boss has to show a profit, no matter WHAT he pays out, or to whom it is paid. Say he hires you at $10 an hour. He actually has to pay $10.70 an hour, due to SS. Now, say, magically SS disappears. His competition is smart enough to offer to pay $10.70 an hour, while your boss tries to KEEP that "extra" 70c an hour that is then not given to the gov/t. Anyone with sense is going to quit go work for your boss's competitor, along with telling their new boss everything that they know about the first boss. It is ALL your money, your boss just helps govt steal more of it from you. Why would your boss CARE whom he pays it to, you or the govt? It's still GONE. he SHOULD prefer to give it to his employees, rather than to govt. SS slams poor workers a LOT harder than it does those making $30 an hour and more.
Including the CEO who takes a $1 annual salary, with millions of dollars in stock options or other remuneration. What's your point? Those earning $10 probably pay very little or no income tax at all, which is the tax used to fund the government. Social security and Medicare taxes are collected with the assumption that those paying will receive something back at retirement.
There's actually a cap on payroll taxes-- you don't pay FICA on earned income past a certain amount, which was somewhere around eighty or ninety thousand dollars per year last I checked.
The facts are readily available to anyone and everyone. Currently there is a $118,500 cap on the OASDI portion, but since 2013 there is no cap on the HI portion with a 0.9% additional tax assessed on income exceeding $200K/$250k based on filing individual/joint. I've yet to determine the point of this thread intended by the OP, and lacking a response by 'gorte' perhaps there was none intended?
The original reason everyone consented to this 15% tax was because the politicians promoting it said it "wasn't really a tax", that people would get their money back when they retired. Same thing with the Medicare tax. But over the years the government attached more and more strings to these programs. You can get your money back, but only if...
and who pays the workers comp for you?..your boss..time to take an economics class..years ago they taught kids this in 10th grade...
I pay what is called "social security tax", and I make less than that. It's on my check stub for every paycheck. http://en.wikipedia.org/wiki/Federal_Insurance_Contributions_Act_tax For 2014, the employee's share of the Social Security portion of the FICA tax is 6.2% of gross compensation up to a limit of $117,000 of gross compensation (resulting in a maximum Social Security tax of $7,254).[8] This limit, known as the Social Security Wage Base, goes up each year based on average national wages and, in general, at a faster rate than the Consumer Price Index (CPI-U). For the calendar years of 2011 and 2012, the employee's share was temporarily reduced to 4.2% of gross compensation with a limit of $106,800 for 2011 and $110,100 for 2012.[9] The employee's share of the Medicare portion of the tax is 1.45% of wages, with no limit on the amount of wages subject to the Medicare portion of the tax.[10] Because some payroll compensation is subject to state income tax withholding in addition to Social Security tax withholding and Medicare tax withholding, the Social Security and Medicare taxes account for only a portion of the total percentage an employee constructively pays. The employer is also liable for 6.2% Social Security and 1.45% Medicare taxes,[11] making the total Social Security tax 12.4% of wages and the total Medicare tax 2.9%. (Self-employed people are responsible for the entire FICA percentage of 15.3% (= 12.4% + 2.9%), since they are in a sense both the employer and the employed; however, see the section on self-employed people for more details.)
Actually, your employer does pay the matching 7.65 of FICA taxes. When you and your employer come to an agreement on wage it does not include the additional 7.65. That is an added cost for the employer. Now, you are right that if SS/Medicare went a away, market forces would force him to raise your hourly wage.
Somewhat associated to this discussion is unemployment taxes. These are taxes paid by the employer. It is not a tax on your earnings. It is an additional cost of doing business to the employer. This means that unemployment benefits are a welfare program. It is not money employees paid in as an insurance. As with any welfare program, it is taxes that are used to pay for a program. You loosing your job is only a qualification for this particular welfare program. You did not earn or pay for this money if you collect it.
The only problem is that when people get to the age of retirement there would be nothing there for them. I read somewhere that the average person has $60.00 in the bank when they reach retirement age. So Social Security is a good thing. I have just reached the early retirement age and I am glad I paid into the system for nearly 50 years and when I reach 66 it will be fifty years. When a person gets my age they are about done. The bones ache, the flexibility leaves, and the strength wanes. An employer usually wants someone younger and stronger with less of an insurance risk. So you may make a little more money now, but when you get older and really need it...if you don't pay in...it won't be there.
Social security is an abomination to freedom. It takes a significant amount of an individuals ability to self invest and build personal wealth. It causes dependency of near poverty stipends and it is managed in a way that if done so in the private sector people would be jailed. It is sad that you fell into this trap,and actually defend it.
That it's a worthwhile tax is debatable, but it is indisputable that it being a on top of your pay rather than inclusive of it is a completely pointless propaganda tactic used to fool people into thinking it's not out of your pay, but in addition to it. Saving for retirement should be voluntary. Period.
What I don't understand in the political diatribes today is why so many Americans don't pay income taxes, many even getting refunds, and now these same people don't want to pay the FICA withholding which is a DIRECT benefit to them in retirement and health care? The government cannot give people the option of not paying FICA since it is a fact that tens of millions will end up at retirement age with absolutely nothing but your $60. I have no problem with the progressive income tax system we have today, however, I do not agree forcing others to fund FICA for those who refuse to fund their own FICA. What this essentially does is allow tens of millions of Americans to live and work and retire in the US and never pay a dime to fund their lifestyle. This doesn't seem very American to me?
I would like to see Social Security changed to give a person a better retirement. I think that everything paid in should be paid back to the individual on an individual basis and interest paid to the individual at the prime rate for every year he donates. If a person dies before full benefits are paid he should have a beneficiary to receive the rest of the money.
The obvious problem is that most people do live in the present and fail both to manage their finances or to save for the future. Eliminating Social Security and allowing people to starve in the streets or go homeless is probably not a very realistic or humane attempt at changing behavior.
And of course if the person exceeds his benefits what do you think should happen. Maybe bill his children or let him starve in the street. Social Security is essentially a safety net not a forced savings program.
m There was no public demand for SS when it was initiated, no different than obamacare. It has caused public dependency. A proper compromise would be mandated personal accounts that do not subject one generation to another.
There was a problem that clearly needed to be addressed and Social Security was the solution of choice. Would you actually support the government mandating retirement accounts and specifying how individuals had to fund it. Imaging the Conservative squawking if such a plan was proposed today. And then of course the government would have had to add money for those who didn't earn enough to fund their retirement account and here we would be.
I'm not for any government controls, programs or participation in anyone's personal incomes. At this point, Americans are too dumbed down to not have some mandated savings, but it should be limited to private accounts. These accounts could be qualified products that include mutual funds, term life and disability insurances. They would be far superior in benefits and would have no generational burden.
American's have always been too dumbed down not to have mandated savings. And investing government required retirement accounts in term life and disability insurance would be fiscally irresponsible. And the last place you would want the national retirement plan would be in an investment vehicle as volatile as Mutual Funds.
So what would you suggest should be done when people reach retirement age and do no have enough savings to survive for the rest of their lives. I guess we could think that people starving in the streets would provide a valuable lesson for future generations.