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To: Dan3 who wrote (158304)	10/18/2008 2:26:35 PM
From: GraceZ	Read Replies (1) \| Respond to of 306849

I was referring to Federal taxes not employment taxes which is another subject altogether but it doesn't surprise me that the average person doesn't understand the difference between those two. When you are discussing marginal rates, you are talking about Federal taxes not Social Security and Medicare. Those employment tax rates were set way back when Greenspan testified to Congress back during the last great SS/Medicare "fix" in the 80s. The one thing that did occur in the last eight years is the increase in numbers of households that fell into the negative federal tax rate with the expansion of the EIC. BTW the surplus employment taxes which, of course, end up being borrowed and put into the general fund almost always equal the amount spent on those portions of the budget that go to fund SSI and Medicaid, the social programs that are welfare programs not funded with premiums paid in. Meanwhile the other functions of the government, aside from transfer payments to individuals, still have to be funded by borrowing and tax receipts. The average household below the median contributes around $800 a year to the approximately 1.5 trillion dollars of tax receipts needed for that budget with many millions of households contributing zero or having a negative rate, a situation where they get a discount of amounts paid in for employment taxes.