The Federal government cooks the books on both ends. Benefits and
tax brackets are indexed to CPI. They lower the CPI through
adjustments since 1993. Before 1993, they used historical weights of
price components from 15 years back, They've changed it twice since
then to 5 years and now to 3 1/2 year old weights. Furthermore, the
US government hasn't changed the way in which the ceilings on FICA tax
is calculated. As shown below, the FICA tax ceiling grew by $ 4200 or
6.1% or three times the official rate of inflation. No wonder, the
government is running a 'surplus' since SS benefits grow much slower
with the artificially low COLA and the exorbitant increase in the
ceiling shown below increases taxes without need for a vote.
FICA wage base Old age, survivors, and disability insurance:
and rates 6.2% on $68,400, $72,600 for 1999 (employee &
employer)
12.4% on $68,400, $72,600 for 1999 (self
employed)
|
