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Old January 10th, 2010, 05:39 PM   #1
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FICA payroll tax

Employee FICA payroll tax contributions are proportionately a greater burden upon wage earners who are among our populations lowest earners. Aside from the 7.6% of their wages from dollar one that they directly pay, similar to all of us they pay the 15.2% of all labor expenses imbedded within the domestic goods and services they and their families purchase.



If a family earns so little that they pay no income tax, they must spend their entire take home pay (which can't exceed 92.4% of their gross earnings. (Yhat doesn't consider additional witholding taxes such as unemployment and workman’s compensation insurance; (I’m assuming there’s no state income tax upon their tax bracket).



I don’t know what proportion of aggregate USA families’ spending is due to direct and imbedded labor expenses as opposed to direct or imbedded material expenses. I’m supposing it is not less than 30% and I would not say anyone’s wrong if they supposed it’s as high as 65% of the families gross spending.



Thus families completely dependent upon wages that are insufficient to require any income tax payments are paying an estimated range from 19.4% to 24.3% of their spending for direct and indirect FICA payroll taxes.



Isn’t that quite a bit for a wage earning family that pays no income taxes?



Because employers pay FICA taxes on labor expenses rather than income or revenue, the payroll tax specifically tagets and inhibits job creation to the detriment of families dependent upon wages.



Respectfully, Supposn





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Old January 11th, 2010, 11:30 AM   #2
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Quote:
Originally Posted by Supposn
Employee FICA payroll tax contributions are proportionately a greater burden upon wage earners who are among our populations lowest earners. Aside from the 7.6% of their wages from dollar one that they directly pay, similar to all of us they pay the 15.2% of all labor expenses imbedded within the domestic goods and services they and their families purchase.



If a family earns so little that they pay no income tax, they must spend their entire take home pay (which can't exceed 92.4% of their gross earnings. (Yhat doesn't consider additional witholding taxes such as unemployment and workman’s compensation insurance; (I’m assuming there’s no state income tax upon their tax bracket).



I don’t know what proportion of aggregate USA families’ spending is due to direct and imbedded labor expenses as opposed to direct or imbedded material expenses. I’m supposing it is not less than 30% and I would not say anyone’s wrong if they supposed it’s as high as 65% of the families gross spending.



Thus families completely dependent upon wages that are insufficient to require any income tax payments are paying an estimated range from 19.4% to 24.3% of their spending for direct and indirect FICA payroll taxes.



Isn’t that quite a bit for a wage earning family that pays no income taxes?



Because employers pay FICA taxes on labor expenses rather than income or revenue, the payroll tax specifically tagets and inhibits job creation to the detriment of families dependent upon wages.



Respectfully, Supposn




FICA is an incredibly regressive tax. Moreover, most people foolishly believe their social security money is "theirs". It is not.
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Old January 11th, 2010, 12:35 PM   #3
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Originally Posted by leighredf
FICA is an incredibly regressive tax. Moreover, most people foolishly believe their social security money is "theirs". It is not.
So I take it you don't support the "flat tax"?
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Old January 16th, 2010, 04:34 AM   #4
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Fair tax

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Originally Posted by fxashun
So I take it you don't support the "flat tax"?


Fxashun on the contrary, I’m an advocate of taxing consumption rather than income but I do not believe it can entirely replace income taxes. I do advocate a general consumption tax, (e.g. the “fair tax”) for funding net federal healthcare expenses.



Employees’ FICA contributions are direct and greatest burdens to wage and salary earners. Some other sources of income are not directly subject to FICA tax.



Employers FICA contributions are eventually are paid by purchasers and thus act as sales taxes. Because the tax is directly upon payrolls rather than incomes or revenues, employers’ contributions more specifically inhibit hiring and job creation.



Wage earners directly and indirectly carry greater proportions of FICA‘s aggregate tax burden,



Respectfully, Supposn
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Old January 16th, 2010, 05:30 AM   #5
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I maxed out on FICA deductions in October. I was clearing about $800 more a month as a result. Now my check is back down to usual again.
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Old January 16th, 2010, 06:44 AM   #6
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Originally Posted by fxashun
So I take it you don't support the "flat tax"?


Wrong. I don't oppose a flat tax that keeps on going. FICA stops which means the higher your income over the cap, the less % of your income goes into FICA. So, this is regressive. An uncapped flat tax is not.



The cap in 2009 was $106,800. So, the person making $106,800 pays the exact same FICA tax as the person making $1,000,000.



Thus, it is very regressive.
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Old January 16th, 2010, 07:40 AM   #7
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Quote:
Originally Posted by leighredf

The cap in 2009 was $106,800. So, the person making $106,800 pays the exact same FICA tax as the person making $1,000,000.



Thus, it is very regressive.
Yes indeed. I always love it when my max kicks in. It sure makes a difference in the paycheck.
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Old January 16th, 2010, 01:27 PM   #8
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Quote:
Originally Posted by leighredf
Wrong. I don't oppose a flat tax that keeps on going. FICA stops which means the higher your income over the cap, the less % of your income goes into FICA. So, this is regressive. An uncapped flat tax is not.



The cap in 2009 was $106,800. So, the person making $106,800 pays the exact same FICA tax as the person making $1,000,000.



Thus, it is very regressive.
What maximum benefit/income level is SS based on? If the benefit payout criteria is based on a $105K maximum then why would you tax people on more income than you are gonna cover in case of disability or retirement. The tax is the same as the return if you think about it. A person whose benefits are based on a salary of $75k get more back than a person who is taxed based on $30k. And if someone that makes $1 million is only getting paid based on $100k salary, he's getting taxed for something he'll never see in return.
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Old January 16th, 2010, 06:20 PM   #9
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What I recognize.

I’m not opposed to retaining the FICA payroll tax to partially fund U.S. Social Security Administration's retirement and disability annuity programs. (Their payments are primarily based upon the wage earner's lifetime income. I’m certainly opposed to payroll tax funding of heath benefits. There’s no logical relationship between income and health needs and the need’s not limited to those with incomes derived only from wages and salaries.



I recognize it is politically unfeasible to reduce only employers portion of FICA; (which are generally passed to their customers). I recognize that a tax on an employer’s payroll is economically more detrimental because it directly inhibits job creation. I recognize that if there's not a sufficient federal retirement program, poverty among our elderly would be a financial disaster to a large segment of USA’s families and significantly detrimental to our national economy and it’s now under-funded. I recognize that both USA’s government and non-government healthcare is under-funded to the extent that it is now significantly detrimental to our economy.



I advocate a general consumption tax that would fund a third of net Social Security Retirement payments and all net federal healthcare expenses. I advocate that tax utilize the “Value Added Tax” method because it passes on no hidden sales taxes.



Respectfully, Supposn
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Old January 16th, 2010, 06:51 PM   #10
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I’m not opposed to retaining the FICA payroll tax to partially fund U.S. Social Security Administration's retirement and disability annuity programs. (Their payments are primarily based upon the wage earner's lifetime income. I’m certainly opposed to payroll tax funding of heath benefits. There’s no logical relationship between income and health needs and the need’s not limited to those with incomes derived only from wages and salaries.



I recognize that wage earners who pay no income tax because they're anong our nation's least income earnwers, pay 7.65% of their gross income directly and an additional 4.5% to 9.2% of their spet income indirectly for FICA payroll taxes. I recognize it is politically unfeasible to reduce only employers portion of FICA; (which are generally passed to their customers). I recognize that a tax on an employer’s payroll is economically more detrimental because it directly inhibits job creation. I recognize that if there's not a sufficient federal retirement program, poverty among our elderly would be a financial disaster to a large segment of USA’s families and significantly detrimental to our national economy and it’s now under-funded. I recognize that both USA’s government and non-government healthcare is under-funded to the extent that it is now significantly detrimental to our economy.



I advocate a general consumption tax that would fund a third of net Social Security Retirement payments and all net federal healthcare expenses. I advocate that tax utilize the “Value Added Tax” method because it passes on no hidden sales taxes.



Respectfully, Supposn
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