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Old 10-01-2017, 02:56 AM
 
1,286 posts, read 686,065 times
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FICA, particularly FICA levied upon employees is a regressive tax:

Effectively all employees within the USA pay FICA payroll taxes based upon their wages.
The only persons directly subject to FICA taxes are employees. (Self employed persons, (i.e. independent contractors) pay a higher consolidated rate levied upon their wages and the remainder of their enterprises' payrolls).

FICA taxes paid by higher income employees are annually “capped”.

Economies of scale, are less available to smaller enterprises. Specifically, advantages of labor specialization is less available to“mom & pop” enterprises. Taxing enterprises' payrolls rather than net incomes penalizes payroll expansion and additionally is usually more detrimental to small enterprises.

FICA payroll taxes are among, if not the most regressive of all U.S. Federal taxes

Last edited by Supposn; 10-01-2017 at 03:16 AM..
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Old 10-01-2017, 05:30 AM
 
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Did you really have to start this new thread when you had this other one?

Replacing reduced FICA payroll tax rates with a federal general sales tax.

Perhaps you should take the topic to the Great Debate section.
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Old 10-01-2017, 08:31 AM
 
Location: WA
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The other longer thread will point out that 'Federal Insurance Contributions Act' mandates participation and payment of premiums. Although distorted over the years by politicians (like everything else) it is still a plan intended to fund retirement and it is the primary retirement plan of most citizens. The calculations used to determine benefits are quite progressive, not at all regressive.
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Old 10-01-2017, 02:10 PM
 
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Quote:
Originally Posted by cdelena View Post
The other longer thread will point out that 'Federal Insurance Contributions Act' mandates participation and payment of premiums. Although distorted over the years by politicians (like everything else) it is still a plan intended to fund retirement and it is the primary retirement plan of most citizens. The calculations used to determine benefits are quite progressive, not at all regressive.
Unfortunately, those "calculations" don't make Social Security progressive, because longevity is regressive and once you're dead the payments stop.


I could even argue that it healthcare is not a right (and it isn't), Social Security is redistributive upward and immoral.
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Old 10-01-2017, 02:48 PM
 
Location: WA
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Originally Posted by freemkt View Post
Unfortunately, those "calculations" don't make Social Security progressive, because longevity is regressive and once you're dead the payments stop..
It is insurance, not a savings plan. The calculations give low earners a higher return on the premiums paid compared to those that contributed more.
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Old 10-01-2017, 02:49 PM
 
Location: North Beach, MD on the Chesapeake
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Sales taxes are also regressive, as are licensing fees for vehicles in many states.
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Old 10-01-2017, 04:04 PM
 
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Quote:
Originally Posted by cdelena View Post
It is insurance, not a savings plan. The calculations give low earners a higher return on the premiums paid compared to those that contributed more.


If FICA is indeed insurance, Congress has a credibility GAAP and shouldn't be taxing Social Security benefits.
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Old 10-01-2017, 04:06 PM
 
33,046 posts, read 22,034,672 times
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Quote:
Originally Posted by cdelena View Post
It is insurance, not a savings plan. The calculations give low earners a higher return on the premiums paid compared to those that contributed more.


Calculations for a higher return fail every low earner who dies before getting their money back, as they cannot monetize those calculations.
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Old 10-01-2017, 07:36 PM
 
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FICA contributions are regressive and the benefit formula is progressive. The net effect is that lower-income people get quite a nice return on their "investment," one they couldn't possibly get by investing their own. Upper middle income taxpayers get screwed unless they are so upper-middle that the FICA tax recedes into significance (in my opinion this happens around $400,000); they still get a terrible return, but have other opportunities to save and invest.
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Old 10-01-2017, 07:44 PM
 
Location: Raleigh
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Quote:
Originally Posted by freemkt View Post
<>I could even argue that it healthcare is not a right (and it isn't),<>
The right to "Life, liberty, and the pursuit of happiness" implies the right to health. The right of free speech, and to bear arms is similarly guaranteed.
In all cases, to achieve the actualization of these Constitutional rights you have to be able to afford them, not expect other people to pay for your healthcare, write your speeches, or buy a gun for you.
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