Psst, taxes go up in 2013 for 163 million workers

m.yahoo.com...< br />

Republicans question whether reducing the tax two years ago has done much to stimulate the sluggish economy. Politicians from both parties say they are concerned that it threatens the independent revenue stream that funds Social Security.

Tax rates have been increased on the middle class year after year, decade after decade, by the republicans refusal to tie the tax brackets to the rate of inflation. All the while pushing tax cuts for the super rich, and corporations, thereby shifting the tax burden from the wealthy and corporations onto the middle class and small businesses.

reply to post by poet1b

The article is about the reduction in social security taxes which was instituted in 2011. It has nothing to do with income tax. You could have selected a better article if you wanted to complain about that. The rate will be returning to where it was before 2011.

reply to post by Phage


My point is that republicans talk about tax cuts, but they don't support tax cuts for the middle class. Sadly, neither do the democrats.

The upper middle class pays far too much taxes. Any increase in FICA should include a decrease in income taxes.

Originally posted by poet1b
reply to post by Phage

 

My point is that republicans talk about tax cuts, but they don't support tax cuts for the middle class. Sadly, neither do the democrats.

The upper middle class pays far too much taxes. Any increase in FICA should include a decrease in income taxes.

But FICA isn't increasing. It's returning to where it was for many many years. The cut was never meant to last. It's actually surprising it lasted two years. It created a big dent in the fund.

reply to post by poet1b

I suppose it would be too partisan to note that calling EITHER side particularly good about either tax cuts or bad on spending is a little silly. The Repubs had total control for a couple years under Bush. What happened? They spent like drunken sailors on leave after a year at sea....then wondered why anyone was annoyed? Then the Dems had the very same situation for their side over the first 2 Obama years. What happens? Same thing. The Dems did it with more 0's on the end for deficit...a lot more...but that's justifying bad behavior with other bad behavior and I won't do it. It's become something I detest.

Repubs are terrible and proved it when they had Congress and the White House at the same time.

Dems are terrible and proved it when they had Congress and the White House at the same time.

So..what to do? Drop 10, punt and hang on for an E-Ticket ride while many of us gear toward 2016 starting damn near the day after THIS election. Early bird gets the nomination.

Yes, FICA tax amount will "go up" for many Americans as the personal FICA tax rate will return to previous levels.
For 80% of the work force that never approaches the "FICA Maximum Wage", their total out-of-pocket expense was reduced temporarily due to the "cut". HOWEVER, for all those earners whose income exceeds the "FICA Maximum Wage", the out-of-pocket FICA expense stays flat - it just takes a little longer for them to "pay out" on social security. FICA has both a maximum amount one can pay in and a maximum wage taxes are collected on.

Programming payroll systems years ago for fortune 50 corporations it became pretty clear exactly what the problem is with the Social Security setup we now have - THE FICA MAX WAGE SHOULD BE ELIMINATED.
Anyone earning wages pays the 6+% FICA tax only on the first $113,000 of earnings (approximately). All those CEO's and other top wage earners pay out the maximum FICA tax in January or February and get a free ride the rest of the year. Phrased another way, most wage earners pay FICA tax on ALL of their earnings - the guys at the top only pay FICA tax on a fraction of their earnings. To illustrate: If you make $20 million in wages you'll pay the same out-of-pocket FICA tax as someone making $120,000 - you get a free ride on $19,880,000 of your income from FICA tax.

NO WONDER there's a problem with the "Trust Fund" when 80% of the wage earners pay a tax on all of their earnings and 20% of the wage earners only pay the tax on a portion of their earnings ESPECIALLY since 80% of the total wages paid goes to that 20% of earners that only pay a fraction while 80% of the earners pay on all their earnings.
NOTE: I've used the 80/20 simplification for illustrative purposes here - actual mileage varies as we've all read how the disparity in earnings is far more skewed. (Now donning asbestos suit for the inevitable flames to come)

ganjoa

reply to post by ganjoa

THE FICA MAX WAGE SHOULD BE ELIMINATED.

Agree.
Do you happen to know the candidates' stance on this?

reply to post by Phage


Of course not! Neither of the candidates nor their respective political parties would touch this seeing as how both are dependent upon those high-wage earners (and the corporations they control) for their campaign funding.

ganjoa

Originally posted by Phage
reply to post by ganjoa

 

THE FICA MAX WAGE SHOULD BE ELIMINATED.

Agree.
Do you happen to know the candidates' stance on this?

Why should it? FICA was not designed for the rich. Are you also going to eliminate the cap on return too?

Originally posted by ganjoa
Anyone earning wages pays the 6+% FICA tax only on the first $113,000 of earnings (approximately).

you get a free ride on $19,880,000 of your income from FICA tax.

The return cap of about 2k per month is based on 113,000 too. So I pay FICA tax on 20 million, am I only going to get the 2k per month that the 133,000 cap is based on?

reply to post by Xtrozero

Why should it? FICA was not designed for the rich. Are you also going to eliminate the cap on return too?

I think you misunderstand. There is currently a cap on wages subject to FICA tax. Once that cap is reached, the taxpayer doesn't contribute anymore. It has nothing to do with benefits.

What do you mean "cap on return"?

Originally posted by Phage
reply to post by Xtrozero

 

Why should it? FICA was not designed for the rich. Are you also going to eliminate the cap on return too?

I think you misunderstand. There is currently a cap on wages subject to FICA tax. Once that cap is reached, the taxpayer doesn't contribute anymore. It has nothing to do with benefits.

What do you mean "cap on return"?

I'm 52 and I make over the 113k when I retire at age 67 my SS will be about 60k per year. If I made 20 million per year and paid full FICA on all of it my SS at 67 will still be 60k per year. My question is if I pay on 20 million are you going to increase SS yearly income from 60k to 6 million too?

reply to post by Xtrozero

I see your point now and it makes sense if you consider FICA to be an investment. That's not really what it is. It is a tax used to support the entire social security program.

reply to post by Xtrozero


That's right - there is also a maximum monthly benefit amount as well so the $20 million earner gets the same as the $130,000 earner.

ADDED:
It is a tax that's was SUPPOSED to put the money in trust for future benefits - that was my point: there are a small number of earners with a gigantic, untaxed portion of earnings and a huge percentage of earners that always pay the tax because they never "max out". Obviously, the subsistence level payouts from SS aren't important to the wealthy - or those high wage earners!

ganjoa

But FICA isn't increasing.
It's returning to where it was for many many years.
The cut was never meant to last. It's actually surprising it lasted two years.
It created a big dent in the fund.

excactly... the Øbama temporary reduction of weekly FICA tax withholdings was for two political reasons /
One was to do the populist thing that Øbama sang about --- putting more take home money into the hands of the blue collar workers and
~ what Øbama was actually doing [on the slick political side of things] was to put the Social Security System into the RED by not collecting enough tax receipts to cover the outlays---
a situation that he could use for political leverage later on..(possibly during the reelection campaign in 2011)


Øbama deliberately used the payroll FICA Tax reduction to coincide with the Øbama Stimulus with the nonexistant 'shovel ready' jobs


see he was attempting to placate the masses of blue collar wage earners with a slightly higher take-home paycheck while the Øbama campaign contributers got fat contracts from the gov't..
.especially his favorite 'Green Energy' corps that were massive contributers to his 2008 win into office.
(the misdirection scheme) allowed the SS Trust Fund to suddenly need Taxpayer relief , from Congress to keep-it-running-and-solvent for the first time in history..

Øbama engineered a stress on the FICA and Social Security System to baffle the masses with BS
and to put his economic policy failures into a twilight zone/ in a shadowy area that he might be able to use to the administrations advantage in the future


but other events took on greater priority and the (SS/FICA Tax reduction) scheme is but a footnote in the historical record by now... the big red flag Øbama expected to happen with the SS trust fund never materialized
and still to this day there are a few illegal aliens that are paying FICA Taxes into a nonexistant accounts or just pocketing the monies withheld by the corporate masters of the under-the-table labor pool

Originally posted by Phage
reply to post by Xtrozero

 

I see your point now and it makes sense if you consider FICA to be an investment. That's not really what it is. It is a tax used to support the entire social security program.

Well it is kind of a tax... Those who do not pay into it don't get anything, or very little. It seems people want another way to bleed people who make more than 100k per year...heaven forbid...

I paid about 35k in federal taxes alone last year and I start to wonder how much does it cost to be an American. For some it cost nothing, and in fact they make profit, for others they pay a rather big price.

I understand the whole "more you make the more you pay" mentality, but I really don't work so others can have a better life. I work so my family and myself can have a better life.

This doesn't mean I do not care..and in fact I do pay a good amount to charity, but I do have a sister that has no water at the moment because she refuses to get a job. I have really reached the point that my view is that a person is responsible for their own life and it is not up to me to make it better, especially when they do not work on it themselves.

SS was really put into place to help those that go through life (work hard) and end up with nothing. I personally see it as not just another class warfare situation. If a person pays 15k per year into it then they end up with X number of dollars, and if a person puts up to 113k cap that comes out to X number of dollars too when they turn 62 67 or 70.

I could pay more into it, and I could support my sister, but every dollar I use is one less for my OWN retirement, my kids education, or any other situation where I will need money. At some point people need to stop thinking about multi millionaires and billionaires for those people are small in number and are completely removed from the norm.

We tend to think, they will never miss it, they don't need all of it...etc, but who are we to say that? I make good money, but I'm not rich anyway you look at it, and every tax dollar I spend hits my bottom line.


BTW I caped SS about 15 years ago, so I could have stopped working back then and I would have still MAXED SS when I hit 67, so every dollar I payed into it for the last 15 years AND the next 15 years is not going to me at all but everyone else. Once again just how much, as an American, do all of you feel is my share?

Originally posted by ganjoa

ADDED:
It is a tax that's was SUPPOSED to put the money in trust for future benefits - that was my point: there are a small number of earners with a gigantic, untaxed portion of earnings and a huge percentage of earners that always pay the tax because they never "max out". Obviously, the subsistence level payouts from SS aren't important to the wealthy - or those high wage earners!

So I still do not understand why a person should pay more into it than the cap since the SS monthly check is also capped.

Well unless we just want to invent more ways to bleed people for taxes...is that your goal?

I feel all this is like saying Wow a loaf of bread is 3 dollars and it is so unfair that a person who makes 20k per year and a guy who makes 200k per years both pay the same amount.

In the end the guy who put the least in to SS will still get the most out of it....

reply to post by Wrabbit2000


Exactly, neither side is willing to do anything for the average person. Everything goes to the super rich, and average people get stuck supporting the rich and the poor.

Originally posted by poet1b
Exactly, neither side is willing to do anything for the average person. Everything goes to the super rich, and average people get stuck supporting the rich and the poor.

If SS is failing why is it the super rich, or more correctly, those who make more than 113k at fault? Do you think that just maybe the Government is at fault?

reply to post by Xtrozero


If you think people who make a little over six figures a year are super rich, you need to lay off the OxyContin.

Our middle class tax dollars mainly go to subsidize people pulling in millions of dollars a year through fraudulent schemes.