Upside Down Social Security Taxes: NOT INCOME TAXES
Look at the comparisons on the following chart. You will see that the Social Security System heavily favors the highest income earners and severely punishes the lowest income workers.
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Due on income from $1.00 to $90,000 (for 2005)
Income over $90,000 is tax FREE! from Social Security Taxes
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| Type Of Income |
Annual Income |
Employee Amt.
7.65 % |
Employer Amt.
7.65 % |
Total*
15.3 % |
Actual Rate |
Minimum Wage 5.15 /hr.
52 wks @ 40 hrs. |
$10,712 |
$ 820 |
$ 820 |
$ 1,640 |
15.3 percent |
$20.00 /Hr.
52 wks. @ 40 hrs. |
$41,600 |
$3,182 |
$3,182 |
$6,364 |
15.3 percent |
Salary: (wages,
bonus, profit
sharing, etc.) |
$90,000 |
$6,885 |
$6,885 |
$13,770 |
15.3 percent |
Ken Lewis, CEO
Bank of America |
$38,000,000
($38 Million) |
$6,885 |
$6,885 |
$13,770 |
0.0362 % |
Bill Gates, Founder,
Microsoft Corp. |
$1,000,000,000
($1 Billion) |
$6,885 |
$6,885 |
$13,770 |
0.001377 % |
Mel Gibson, Producer,
Passions of Christ |
$200,000,000
($200 Million) |
$6,885 |
$6,885 |
$13,770 |
0.006885 % |
| * Employees pay 7.65 percent and employers must match that amount. The self-employed must pay both halves, or the total of 15.3 percent.
The chart could go on and on… Every business executive, movie star, hip-hop artist, singer, song writer, pro athlete, politician, etc., etc., making $90,001 or more does not pay ANY AMOUNT of that over $90,000 into Social Security.
The current method is ridiculous. Why not a system that STARTS at the TOP of the income scale and comes DOWN, stopping at a figure above minimum wage to give the lowest income people a break instead of the highest income fat cats.
Republicans will scream that such a change would be a tax increase but so be it. Let them scream and let there be a tax increase. The only consideration I can see is the matching amount from employers might place a heavy burden on business competition overseas but with today's computer systems doing the calculations, a modification to the matching amount could easily handle that problem.
I propose that everyone contact their Senators and Representatives and let them know: A TOP-DOWN system needs to be explored. -- And just maybe . . . enough money could be raised with a TOP-DOWN approach to finance a change-over to individual accounts instead of the federal government borrowing billions to do the same thing!
. . . . . . . . . . . Frank Laughter
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