FICA tax proposal.

FICA tax proposal:

FICA is the most regressive federal tax. It’s particularly a burden upon the working poor and their dependents.

It’s proposed half of the payroll’s 12.4 earmarked for Social Security, and the entire 2.9% earmarked for Medicare to be revenue neutrally transformed from the FICA payroll tax to an effectively 4.55% general sales tax earmarked for the same purposes.

This proposal would not increase net taxes upon the working poor and their dependents but due to the greater base of taxes upon USA’s general sales rather than upon payrolls, it increases federal revenues available for Social Security and Medicare. It would effectively reduce the net aggregate taxes levied upon employers, (i.e. it’s effectively a reduction of taxes upon enterprises); it effectively increases the net taxes levied upon all individual’s incomes not subject to FICA payroll taxes.
(Spending, rather than what’s reported on income tax forms, more accurately reflect comparative net incomes and/or wealth among the spenders).

If some of the economic and social benefits due to this proposal are not passed on by states to their unemployed recipients of their state’s funded public assistances, this proposal would be somewhat detrimental to those recipients.

Respectfully Supposn

I'm Supposn said:

FICA tax proposal:

FICA is the most regressive federal tax. It’s particularly a burden upon the working poor and their dependents.

It’s proposed half of the payroll’s 12.4 earmarked for Social Security, and the entire 2.9% earmarked for Medicare to be revenue neutrally transformed from the FICA payroll tax to an effectively 4.55% general sales tax earmarked for the same purposes.

This proposal would not increase net taxes upon the working poor and their dependents but due to the greater base of taxes upon USA’s general sales rather than upon payrolls, it increases federal revenues available for Social Security and Medicare. It would effectively reduce the net aggregate taxes levied upon employers, (i.e. it’s effectively a reduction of taxes upon enterprises); it effectively increases the net taxes levied upon all individual’s incomes not subject to FICA payroll taxes.
(Spending, rather than what’s reported on income tax forms, more accurately reflect comparative net incomes and/or wealth among the spenders).

If some of the economic and social benefits due to this proposal are not passed on by states to their unemployed recipients of their state’s funded public assistances, this proposal would be somewhat detrimental to those recipients.

Respectfully Supposn

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I'm concerned by concentration of wealth at levels which cannot sustain a healthy middle class. How should a disillusioned majority group of impoverished people react when the tax code forces them to work longer hours to afford the traditional lifestyle? The same level of taxation could be a boon if only people who need benefit from public services received the necessary level of accommodation. It makes more sense for spending to address social deficits than to continue down the failed path of supply side economics.

I'm Supposn said:

FICA tax proposal:

FICA is the most regressive federal tax. It’s particularly a burden upon the working poor and their dependents.

It’s proposed half of the payroll’s 12.4 earmarked for Social Security, and the entire 2.9% earmarked for Medicare to be revenue neutrally transformed from the FICA payroll tax to an effectively 4.55% general sales tax earmarked for the same purposes.

This proposal would not increase net taxes upon the working poor and their dependents but due to the greater base of taxes upon USA’s general sales rather than upon payrolls, it increases federal revenues available for Social Security and Medicare. It would effectively reduce the net aggregate taxes levied upon employers, (i.e. it’s effectively a reduction of taxes upon enterprises); it effectively increases the net taxes levied upon all individual’s incomes not subject to FICA payroll taxes.
(Spending, rather than what’s reported on income tax forms, more accurately reflect comparative net incomes and/or wealth among the spenders).

If some of the economic and social benefits due to this proposal are not passed on by states to their unemployed recipients of their state’s funded public assistances, this proposal would be somewhat detrimental to those recipients.

Respectfully Supposn

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It would also be detrimental to those receiving social security retirement and disability benefits. The idea of social security was to tax current workers and their employers to (help) fund current retirees and the disabled. Depending on what is not exempt from your new national sales tax it could end up being even more regressive.

ttwtt78640 said:

It would also be detrimental to those receiving social security retirement and disability benefits. The idea of social security was to tax current workers and their employers to (help) fund current retirees and the disabled. Depending on what is not exempt from your new national sales tax it could end up being even more regressive.

Click to expand...

ttwtt78640 said:

It, [i.e. a federal sales tax] would also be detrimental to those receiving social security retirement and disability benefits. The idea of social security was to tax current workers and their employers to (help) fund current retirees and the disabled. Depending on what is not exempt from your new national sales tax it could end up being even more regressive.

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Ttwtt78640, a general sales tax is not detrimental to those that derive their incomes from sources less “fixed”; (i.e. they do not particularly detrimental to incomes derived from current employment or investments that subject to risks and profits). Social Security benefits are annually monitored and pegged to a cost-price index and retain their purchasing powers.

I’m a proponent of the federal minimum wage being similarly pegged to retain its purchasing power. The minimum wage rate is not among the primary causes of U.S. dollar’s inflation but it’s certainly a victim of that inflation.

Respectfully, Supposn

Celebrity said:

I'm concerned by concentration of wealth at levels which cannot sustain a healthy middle class. How should a disillusioned majority group of impoverished people react when the tax code forces them to work longer hours to afford the traditional lifestyle? The same level of taxation could be a boon if only people who need benefit from public services received the necessary level of accommodation. It makes more sense for spending to address social deficits than to continue down the failed path of supply side economics.

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Celebrity, excepted from the post you quoted: “This proposal would not increase net taxes upon the working poor and their dependents but due to the greater base of taxes upon USA’s general sales rather than upon payrolls, it increases federal revenues available for Social Security and Medicare. It would effectively reduce the net aggregate taxes levied upon employers, (i.e. it’s effectively a reduction of taxes upon enterprises); it effectively increases the net taxes levied upon all individual’s incomes not subject to FICA payroll taxes.
(Spending, rather than what’s reported on income tax forms, more accurately reflect comparative net incomes and/or wealth among the spenders)”.

It's contended a sales tax, rather than a payroll tax would provide our nation with greater economic and social benefits, it would be more beneficial to those deriving their incomes from employment, and it would be particularly greater benefits (proportional to their incomes), for the working poor and their dependents.

I’m opposed to Republicans' intentions to reduce Social Security and Medicare benefits.

Respectfully, Supposn

I'm Supposn said:

Ttwtt78640, a general sales tax is not detrimental to those that derive their incomes from sources less “fixed”; (i.e. they do not particularly detrimental to incomes derived from current employment or investments that subject to risks and profits). Social Security benefits are annually monitored and pegged to a cost-price index and retain their purchasing powers.

I’m a proponent of the federal minimum wage being similarly pegged to retain its purchasing power. The minimum wage rate is not among the primary causes of U.S. dollar’s inflation but it’s certainly a victim of that inflation.

Respectfully, Supposn

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You said:

it effectively increases the net taxes levied upon all individual’s incomes not subject to FICA payroll taxes

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That clearly includes retirees.

The federal MW applies to less than 4% of workers, while the retired account for over 14% of the population. I too favor indexining the federal MW to the CPI. One must also remember that the "safety net" provides tax free benefits to many of the working poor - that portion of the population (about 25%?) would also be subject to your additional sales tax - greatly reducing their, already limited, current purchasing power.

https://www.washingtonpost.com/news...-working-class-whites/?utm_term=.36b369be6f26

Regarding this proposal's shifting of tax revenue sources effectively increases the net taxes levied upon all individual’s incomes not subject to FICA payroll taxes:

ttwtt78640 said:

... That clearly includes retirees.

The federal MW applies to less than 4% of workers, while the retired account for over 14% of the population. I too favor indexining the federal MW to the CPI. One must also remember that the "safety net" provides tax free benefits to many of the working poor - that portion of the population (about 25%?) would also be subject to your additional sales tax - greatly reducing their, already limited, current purchasing power.

https://www.washingtonpost.com/news...-working-class-whites/?utm_term=.36b369be6f26

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TTwtt78640, we apparently agree that federal minimum wage, (FMW) rate is legally applicable to almost every USA job; due to the concept of comparative wages, the minimum rate’s a positive bolster of wages and inversely affects all USA job compensations; (i.e. FMW rate proportionally increases lower rates more and higher rates less).
FMW rate is not among the primary causes but rather a victim of U.S. dollar’s inflation; we’re both proponents of pegging it to a CPI. I’m an old man and reasonably expect USA’s FMW rate will within my life time, be annually pegged to retain its purchasing power.

To the extent that individuals’ incomes are derived from employment, reducing their payroll taxes by 4.55% and replacing it with a 4.55% sales tax would not be of any financial detriment to them.

The Republicans intentions to reduce those benefits would be of net detriment to USA’s economic and social wellbeing; particularly detrimental to those retirees’ and their families that are less able to be self-supporting.
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(Due to USA payrolls being a lesser than a general sales tax base), reducing FICA taxes by 9.1% of payrolls would be equivalent to greater than a 4.55% reduction of corporate tax rates; although this shift of revenue sources would effectively be no net difference to wage earner’s net taxes, (due to USA payrolls being a lesser than a general sales tax base) it would increase revenues for Social security and Medicare which is of net benefit to USA’s economic and social wellbeing, particularly to retired wage earners and their dependents, and most particularly to lower income retired employees and their dependents.


Ttwtt78640, Social Security benefits are annually cost of living adjusted. they would not be detrimentally effected by a federal general sales tax.
The preponderance of Social Security beneficiaries lack sufficient annual incomes and are not subject to any federal income taxes; the majority of remaining Social Security beneficiaries paying income taxes upon those benefits, pay only the minimum income tax rates upon fractions rather than their entire annual incomes. Only Social Security beneficiaries with higher incomes pay income taxes upon any significant portions of their total annual incomes or pay more than the minimum income tax rates.

I'm blocked (by I suppose the Washington Post) from reading your linked site.

Respectfully, Supposn

FICA is the most regressive federal tax. Respectfully, Supposn

2016 federal tax calculations:

Single employee, standard deductions no dependents,
grosses $24,900.00 earnings ENTIRELY from wages:
Pays (1,543.80 + 361.05) = 1,904.85 FICA + $1,715 income tax = $3,619.85 federal taxes

Single employee. standard deductions no dependents,
gross 27,250 + 6,300 = $33,550 earnings NOT derived employment, pays $3,620.00 federal taxes

Married couple, standard deductions no dependents,
(EACH grosses $24,900 earnings),
$49,800.00 total ENTIRELY from wages.
Pay $3,809.30 FICA + $3,434.00 income tax = 7,243.30 federal taxes.

Married couple, standard deductions no dependents,
grosses $75,200.00 earnings NOT employment derived, pays $7,244.00 federal taxes.

I'm Supposn said:

FICA tax proposal:

FICA is the most regressive federal tax. It’s particularly a burden upon the working poor and their dependents.

It’s proposed half of the payroll’s 12.4 earmarked for Social Security, and the entire 2.9% earmarked for Medicare to be revenue neutrally transformed from the FICA payroll tax to an effectively 4.55% general sales tax earmarked for the same purposes.

This proposal would not increase net taxes upon the working poor and their dependents but due to the greater base of taxes upon USA’s general sales rather than upon payrolls, it increases federal revenues available for Social Security and Medicare. It would effectively reduce the net aggregate taxes levied upon employers, (i.e. it’s effectively a reduction of taxes upon enterprises); it effectively increases the net taxes levied upon all individual’s incomes not subject to FICA payroll taxes.
(Spending, rather than what’s reported on income tax forms, more accurately reflect comparative net incomes and/or wealth among the spenders).

If some of the economic and social benefits due to this proposal are not passed on by states to their unemployed recipients of their state’s funded public assistances, this proposal would be somewhat detrimental to those recipients.

Respectfully Supposn

Click to expand...

FICA is the most regressive federal tax.
2016 federal tax calculations:

Single employee, standard deductions no dependents,
grosses $24,900.00 earnings ENTIRELY from wages:
Pays (1,543.80 + 361.05) = 1,904.85 FICA + $1,715 income tax = $3,619.85 federal taxes

Single employee. standard deductions no dependents,
gross 27,250 + 6,300 = $33,550 earnings NOT derived employment, pays $3,620.00 federal taxes

Married couple, standard deductions no dependents,
(EACH grosses $24,900 earnings),
$49,800.00 total ENTIRELY from wages.
Pay $3,809.30 FICA + $3,434.00 income tax = 7,243.30 federal taxes.

Married couple, standard deductions no dependents,
grosses $75,200.00 earnings NOT employment derived, pays $7,244.00 federal taxes.