Thoughts On “Michael J. Boskin: Five Lessons for Deficit Busters”
February 20th, 2012
The Medicare Hospital Insurance (HI) would remain at 1.45 % tax rate for employee relations and employer. Whereas the Old-Age, Survivors and Disability Insurance (OASDI) presently 6.2 % tax rate for employee and employer would be changed to be entirely paid by employee at set base amount minimum (estimated 8 %) with allowance for larger withholding. The larger allowance would be used by those with an adjusted gross income larger than wages. This accomplishes the means test aspect of Social Security.
If it’s combined with regular income tax you will never know the true Social Security costs for indexing purposes and furthermore Congress cannot be trusted to not game the system.
It is important for the employee to be fully aware of the cost. Using an intermediary like the employer masks the costs. For example the medical insurance paid by the company is remote and not considered by the employee or the government as income. Employees who work for companies that don’t provide insurance are actually being paid a lower hourly wage.
Entry Filed under: business news daily