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Go ahead and take a tax deduction on both sides of the payroll taxes you’re allegedly paying and see where that gets you.
This proves nothing other than that the rest of the tax system is rigged to play along with the FICA fiction.
BTW there is a good point from the Tax Foundation (linked above) about this topic. You might say, so what if it's a fiction. We pay what we pay, If the fiction were removed, we would still have to pay the 15.3%; it would just seem a little more painful.
Quote:
Originally Posted by Tax Foundation
[this fiction] masks the costs of the programs that payroll taxes pay for. That is, rather than directly listing the ordinary taxpayers’ share of payments for Social Security and Medicare, half of the taxes that fund the programs are hidden from workers...This... violates the principle of tax transparency: a tenet that states that tax burdens should not be hidden from taxpayers in complex structures...
So because of this fiction, this economic slate of hand, voters may support policies that they otherwise would not.
It also means that my income would skyrocket, since I could just rob banks and nobody would stop me. I could also move into a much nicer house, just by killing the occupants and taking it. Darn those taxes anyway.
Incorrect.
Pursuant to the Declaration of Independence, governments are instituted among men to secure Creator endowed rights. Ergo, no endowment is subject to taxation, since said rights could be impaired by high taxes. Only government privileges are subject to taxation.
The question is : what changed your tax exempt endowment to life, liberty, absolute ownership of private property, etc, into revenue taxable privileges under glorious socialism?
Hint: it may involve an account and a number.
And it's 100% voluntary !
“The Social Security Act does not require an individual to have a Social Security Number (SSN) to live and work within the United States, nor does it require an SSN simply for the purpose of having one...”
- - - The Social Security Administration
The tax system is not set up for the advantage of a "wage earner", they don't hire lawyers to bend the tax laws to make big loopholes that the high earners can drive their Hummers through.
I was self-employed, modest earnings, had a CPA do our taxes and never, NOT ONCE in 24 years did he ever make any suggestions on how we could pay less taxes, even when I directly asked. But I read a lot and pay attention and brought ideas, perfectly legal ones, on how to structure our earnings so we got some of the same tax advantages that the rich people use. Bonuses for example. Big swingin clucks on Wall Street don't pay no FICA on their giant bonuses, only the little people pay FICA because they get a set paycheck. I set our business up so that we got a wage and anything above that was profit and paid as a bonus. CPA looked surprised when I told him this is how we're doing it but no disagreement. He probably took credit when he suggested to other clients.
Until salarywomen and salarymen band together and vote together the tax system will continue to favor the big swingin'. Wage earners have the power in numbers but continue to be divided by other issues.
We get the government we deserve and all the taxes they put upon us.
addendum: tax deductions are another huge farce. Most people think when they donate to charity that they get to deduct that amount off their tax bill. No No No. If you are in the 20% tax bracket (or whatever bracket you are in) you get only that tax % benefit. Many is the year that my taxable deductions always were within $100 of just taking the standard deduction. A lot less work, no bitsy receipts to keep, lose and calculate at tax time.
I still give to good charities but I know it's coming out of my pocket, no benefit to me at all.
I'll bet 80% of taxpayers don't understand this at all.
It is never a good idea to divorce the consumption of a given good or service from who pays for it.
Trying to pretend that employers magically pay "their" part of SS from some magical pool of money that has nothing to do with the costs of labor makes some weak-minded people feel good, but it doesn't change the fundamental reality of the situation.
It is never a good idea to divorce the consumption of a given good or service from who pays for it.
Trying to pretend that employers magically pay "their" part of SS from some magical pool of money that has nothing to do with the costs of labor makes some weak-minded people feel good, but it doesn't change the fundamental reality of the situation.
JNoJr, undeniably, enterprises generally pass on all of their normal expenses, and employers' FICA payroll taxes are normal enterprise expenses. The topic's question is, who do they pass it on to; their customer or their employees, or do they themselves “swallow the costs”?
Employee's federal minimum wage rate is employees' minimum entitlements, they cannot be reduced; that's the federal law. Thus, individual employee's first $7.25/per each of their regular hours, and $10.375 of each of their overtime hours, cannot be passed on to employees.
For most enterprises, that's a substantial portion of their payrolls that cannot be passed on to employees.
The sales markets and labor markets that enterprises participate within, determine what portions of their remaining expenses they can or cannot pass on to employees or to customers. Those are determinations of individual enterprises managers.
WRONG.
All taxes come out of the pocket of the consumer.
Where else does the employer get the money to pay his employees?
And you can bet that the price is bumped high enough to cover his costs and still make a profit.
Or he goes bust.
Which also means if government ceased taxing business and labor, prices would plummet.
Not all of them. Not sure why capitalists keep saying how stupid Marx is for having the labor theory of value while also saying that the cost that goes into the product determines the price.
Taxing monopoly income is eaten by the monopolist because the price is set by the market, not the cost to produce. Only in competitive markets is this true.
I do not mention this to encourage taxes BTW. I mention it because da guberment should not be taxing goods and service when it can tax the monopoly profits that tend to come from da guberment anyway.
yep , no news here . any perk you get is a trade off . the employer pays it and you get that much less in wages .
aren't we paying for for the grocery store owners fica and insurance's when we buy something ? we sure are . in the end those employer dollars come from us the consumer so in effect you can say we are paying the whole thing not the employer
In my industry you can pay W2 wages OR go the 1099 route. Obviously the 1099 route sounds more lucrative for the employee (higher wage) but at the end of the year it usually balances out in favor of the W2 employee.
A true 1099 employee is supposed to provide everything from the truck to the supplies/materials. When they are "negotiating" they quickly overlook the obvious or estimate low on actual expenses.
I have started guys at $600 a week and heard the "my friend makes $1000 a week" example. So I follow up with so how much does he have left at the end of the month (after paying all the expenses)? The "dumbfounded look" is priceless.
Truck payment: $400
Gas (100 week): $400
Insurance: $200 month
Materials: $400-500 week
Sounds like your friend makes about $300 a week net.........So would you rather start at $600 or make $300 like your friend. They smile instantly and are thrilled at making $600 even if $1000 sounded way better!
I learned eons ago in econ 101 that the "employer's share" of social security contributions amounts to a bookkeeping fiction, an economic sleight of hand. Officially, the current rates are 6.2% (of income) paid by the employer, and 6.2% by the employee, for a total of 12.4%. There's also a 1.45% payment by employer and employee for Medicare.
All told, it adds up to 15.3% of every paycheck, capped currently at $128,400/yr.
The truth is that all 15.3% comes out of the employees' pockets. This is generally true of payroll taxes. The Congressional Budget Office is staffed with bunches of PhD economists who understand this. For all analysis,
I knew a guy who owned a real estate business. When I told him the entire 15.3% comes out of employees' pockets, he looked at me in disbelief. "I write those [SS] checks," he exclaimed. I bet that not one in 100 Americans understand this, even though Social Security is not far from being 100 years old.
Show your work where employees are promised an hourly wage and paid 6.2% less than that gross. which is what you are saying.
The tax system is not set up for the advantage of a "wage earner", they don't hire lawyers to bend the tax laws to make big loopholes that the high earners can drive their Hummers through.
I was self-employed, modest earnings, had a CPA do our taxes and never, NOT ONCE in 24 years did he ever make any suggestions on how we could pay less taxes, even when I directly asked. But I read a lot and pay attention and brought ideas, perfectly legal ones, on how to structure our earnings so we got some of the same tax advantages that the rich people use. Bonuses for example. Big swingin clucks on Wall Street don't pay no FICA on their giant bonuses, only the little people pay FICA because they get a set paycheck. I set our business up so that we got a wage and anything above that was profit and paid as a bonus. CPA looked surprised when I told him this is how we're doing it but no disagreement. He probably took credit when he suggested to other clients.
Until salarywomen and salarymen band together and vote together the tax system will continue to favor the big swingin'. Wage earners have the power in numbers but continue to be divided by other issues.
We get the government we deserve and all the taxes they put upon us.
addendum: tax deductions are another huge farce. Most people think when they donate to charity that they get to deduct that amount off their tax bill. No No No. If you are in the 20% tax bracket (or whatever bracket you are in) you get only that tax % benefit. Many is the year that my taxable deductions always were within $100 of just taking the standard deduction. A lot less work, no bitsy receipts to keep, lose and calculate at tax time.
I still give to good charities but I know it's coming out of my pocket, no benefit to me at all.
I'll bet 80% of taxpayers don't understand this at all.
To my knowledge bonuses are subject to FICA same as wages.
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