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Old February 12th, 2014, 04:10 PM   #1
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FICA payroll tax; our most regressive tax.

FICA payroll tax; our most regressive tax.

Shifting a portion of FICA payroll tax to a federal sales tax.

Medicare is available to almost all of USA’s elderly and Social security retirement is available to almost all of USA’s elderly that were employed in the USA. No one can foretell their financial future condition with certainty. It’s not unusual for even wealthy persons have found themselves in need of Social Security and Medicare in their old age.

Poverty is directly detrimental to those families lacking minimal incomes but additionally it is detrimental to our entire economy. FICA is the most regressive of all federal taxes. It is proportionally greatest harm upon our working poor.

Except for work related injury) there’s no logical relationship between prior employment and medical need.

I advocate that FICA's portion of revenue earmarked for Medicare be entirely, and half of the social security retirement’s portions of FICA be replaced with a general sales tax.

FICA does not at present fully sustain these social programs, it is our most regressive federal tax and this shift of revenue sources is preferable to the reduction of Medicare or Social Security’s retirement benefits.

Employees generally cannot themselves entirely fund their own lifetime annuity program and employers FICA contributions based upon their payrolls are punishing employers for providing payrolls.
I’m opposed to entirely disconnecting the relationship between payroll taxes and social security retirement benefits and I’m opposed to increasing the retirement age.
Although people are living longer, most people’ are physically unable to sustain the production rates they achieved in their prime working years.

Some compromises are called for.
espectfully Supposn
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FICA payroll tax; our most regressive tax.

Addendum: At present, employers’ portions of FICA payroll taxes are imbedded within the prices of all goods and services and passed on their customers. We all pay those employer costs.

Shifting a portion of FICA payroll tax to a federal sales tax.

Each employees’ and employers’ FICA tax would be reduced by 4.65%.
[Medicare’s 0.0145) + (Social Security’s 0.0325) = 4.65%
The 9.1% of payroll that’s reduced from total FICA revenues would be replaced by a 4.65% general sales tax.
The increase of prices due to eliminating 9.1% of USA’s payrolls from FICA’s revenues and enacting a 4.65% sales tax is dependent upon the proportional relationship of payroll subject to FICA and the sales transactions subject to a sales tax.
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If USA’s sales revenues subject to the sales tax are twice our total payrolls subject to FICA, the gross price increases would actually be:
(0.0465)(1/2)[1/1.0465)] > (0.02325)(0.9555) > .0222
the approximate gross price increases would be 2%
and for the working poor a net tax decrease of over 2.4 % .

If USA’s sales revenues subject to the sales tax are triple our total payrolls subject to FICA, the net price increases would actually be:
(0.0465)(1 - 1/3)[1/1.0465)] > (0.031) (0.9555) > .0296
the approximate gross price increases would be less than 3%
and for the working poor a net tax decrease of over 1.5 % .

Respectfully, Supposn

Last edited by Supposn1; February 12th, 2014 at 04:14 PM.
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Old February 12th, 2014, 06:13 PM   #2
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So I guess we are need to stop funding Social Security and medicare..

It is going to happen sooner or later.

Thanks to Borrow and Spend
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