RE: "it isn't tough to raise fica from .0751 to .0851 for both the employee and employer"
The common misconception is the employer pays any part of your Social Security taxes. Your employer's overhead directly affects what your employer is able to pay you. If your gross income is currently $30,000 per year, your employer is paying $2,250 in FICA taxes that would otherwise be included in your pay check and you are paying another $2,250, for a total of $4,500.
You will also pay $4,300 in income taxes, for a total of $8,800.
If you live in a median priced home, you will pay another $2,200 in property taxes, for a total of $11,000. Even if you can't afford to own your own home, this bite will be taken out of your rent in your landlords cost to do business with you.
You will also pay another approximately $2,000 in State sales tax, income tax, or a combination of the two, which brings your total taxes up to $13,000, out of your gross $32,250.
At this point, your total taxes paid is 40% of your income. The first 2 days of every 5 you work goes directly to your State and Federal government, and your spendable income is about $20K per year.
The only problem is that every purchase you make, with what you have left over, includes the tax obligations and overhead of every single company you do business with. Those businesses are also paying property taxes, income taxes, B&O taxes, etc. to make the products and services you purchase available to you.
A very conservative estimate would be 15% of your spendable $20K goes toward those costs, or another $3,000. For things like gasoline, or any of the so called "sin taxes", the percentage is much higher, but I think 15% is close enough for ballpark figuring. So, out of a gross income of $32,250, $16,000 goes toward taxes, or a full 50%. For the 52 weeks out of a year you work, 26 of those weeks you work to pay the government.
If you raise FICA another 2%, or $645, that adds a little over a week to the tax hours you work each year.
Things are already tough. Adding another 2% is the wrong answer.
The correct answer is to put our government on a strict money diet, and hold our elected representatives directly accountable for their actions and spending while serving in their representative capacities |
