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35% = 28% income tax + 6.2% social security tax + 1.45% medicare tax
by pandaman 13y ago
35% = 28% income tax + 6.2% social security tax + 1.45% medicare tax
- greenlander 13y agoIt's actually even worse than that, because the employer is paying an additional 6.2% + 1.45% on your behalf. But from the employer's point of view, it's just another cost of having an employee. It's a zero-sum game. The employee is really paying 28% income + 14.4% social security + 2.9% medicare = 45%. (Actually a hair less because the employer's contribution is not considered taxable income, but in any case the effective tax is > 35%)
- rlanday 13y agoWell, even if the employer pays the cost on paper, because the supply of labor is relatively inelastic, realistically, employees, at least in a competitive labor market, eat that cost through lower wages. I’m convinced it’s a way for the government to hide half the cost of insolvent social programs from people who don’t know about the employer share and/or don’t understand that they’re likely paying most of the cost.
- vonmoltke 13y agoSocial Security tax caps out at an income of $113,700[1]. Medicare tax actually goes up slightly at $200,000, though. [1] http://ssa-custhelp.ssa.gov/app/answers/detail/a_id/240/~/social-security-and-medicare-tax-rates%3B-maximum-taxable-earnings http://ssa-custhelp.ssa.gov/app/answers/detail/a_id/240/~/so...