The current Social Security payroll tax is 12.4% (there is an additional 2.9% for Medicare).
Pete Domenici, R-New Mexico, would eliminate the 12.4 percent Social Security payroll tax for one month.
Second, Forbes ignores the 12.4% Social Security payroll tax (split between employer and employee).
The initial Social Security payroll tax in the late 1930s, for instance, helped send the economy into a tailspin.
Most important is the expiration of the 2% Social Security payroll tax cut.
Workers under the proposed plan were empowered to choose to save and invest in the accounts just half the Social Security payroll tax.
But this estimate excludes unspecified increases in the Social Security payroll tax that would almost inevitably be included in a reform of the retirement program.
The greatest threat to the integrity of the Social Security system was removed by allowing the temporary, 2-percentage-point reduction in the Social Security Payroll tax to lapse.
Finally, the integrity of the Social Security system and its financial strength should be protected by allowing the temporary 2 percentage-point reduction in the Social Security payroll tax to lapse.
To achieve this, he agreed to raise the rate of the (relatively efficient) Social Security payroll tax, thereby helping to protect that flawed system from suffering operating deficits for more than 25 years.
Most conservatives, and Republicans, would like to reform Social Security so that workers could put a portion of their 12.4 percent Social Security payroll tax into a personal account that they own and control (under certain restrictions).
The bill empowers each worker age 50 and below with the freedom to choose a contribution to a personal savings and investment account equal roughly to half of the employee share of the Social Security payroll tax.
FORBES: Social Security Personal Accounts Are A Path To Prosperity
Senate Republicans, meanwhile, pushed for more tax cuts, such as a one-month Social Security "payroll tax holiday" for employers and employees, and tax cuts for businesses.
That, Sullivan observes in a blog post here, is a lot lower tax rate than the Helmsley building janitors likely paid, when Social Security and Medicare payroll tax rates are figured in.
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Nice sound bite, but he's deliberately mixing up the income tax with the Social Security portion of the payroll tax.
More income would be subject to the Social Security payroll (FICA) tax.
In their 1998 report, the Trustees projected that Social Security outlays would exceed dedicated payroll tax revenues in 2013, which was then 15 years away.
The payroll tax for Social Security is 12.4% (split between employer and employee).
That is because the personal accounts finance so much of the future benefits of Social Security that future deficits between continuing payroll tax revenues and continuing benefit obligations of the program are eliminated entirely.
FORBES: Social Security Personal Accounts Are A Path To Prosperity
As a result, same-sex couples could pay as much as double the payroll tax that finances Social Security that an opposite-sex couple would pay.
On top of that, the cut in the payroll tax that funds Social Security will expire, meaning those same middle class families will get hit twice.
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His proposal scraps the entire existing code, including capital gains, interest and dividend income, the estate tax, and the payroll tax that funds Social Security and Medicare.
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That contribution would be financed by a payment each year from general revenues, with no reduction in the payroll tax revenues flowing into Social Security.
FORBES: Social Security Personal Accounts Are A Path To Prosperity
With Social Security, we could make adjustments to the payroll tax.
But the Congressional Research Service found in 2010 that doing away with the payroll tax cap would keep Social Security solvent for at least the next 75 years.
Today your pay is taxed for Social Security, and you pay income tax on that payroll tax.
But some Democrats are wary of any change to the payroll tax, which funds the Social Security program.
The agreement also includes a two-percentage-point payroll-tax reduction, lowering Social Security taxes for most Americans to 4.2% from 6.2% for one year.
Indeed, since the employer half of the payroll tax continued to be paid, while the payment of the benefits was shifted to the personal accounts, the Ryan-Sununu plan eventually resulted in very large Social Security surpluses, which allowed for major cuts in the remaining payroll tax.
Hence, virtually all benefits can be paid out of revenues without having to borrow more money from the public, and the relatively small Social Security deficits expected during the coming decade (3% of payroll tax revenues) can and should be covered by earmarking enough general revenues to redeem the Trust Fund IOUs Congress left behind when it looted Social Security during the past 25 years.
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