Taxes 101 What is the Social Security Tax? Read the Article Open Share Drawer Share this:Click to share on Facebook (Opens in new window)Click to share on Twitter (Opens in new window)Click to share on LinkedIn (Opens in new window)Click to share on Pinterest (Opens in new window)Click to print (Opens in new window) Written by Modified Jul 24, 2019 For many, understanding what the social security tax is exactly can be a little confusing. Here we breakdown the different components that make up the social security tax and go behind the scenes of who pays it and the long history behind it. Embed the above image on your site using the code below: <a href="http://blog.turbotax.intuit.com/wp-content/uploads/2010/11/whatissocialsecurity.jpg" target="_blank"><img loading="lazy" src="http://blog.turbotax.intuit.com/wp-content/uploads/2010/11/whatissocialsecurity.jpg" alt="Social Security" title="Social Security" width="630" height="1437" class="alignnone size-full wp-image-8428" /></a><br /><a href="http://www.turbotax.com/" target="_blank">Free Tax Filing, Efile Taxes, Income Tax Returns</a> – TurboTax.com Written by More from Browse Related Articles Life Listen now: So you want to be rich? Tax Refunds How to Turn Money Into More Money Life Listen now: So you’re buying a home? Family So You’re Living Together? Tax Planning Did You Miss the Tax Deadline? 3 Steps You Can Take Nex… Tax Planning Tomorrow is the Tax Deadline: 7 Things You Need to Know… Self-Employed Do Creators Pay Taxes on Money Earned? Tax Refunds Let’s Have A Real Money Talk Tax Planning Taxes Done? Find Out Which Tax Records You Should Keep TurboTax News Show Us How You #TurboTaxAndRelax for a Chance to Win $… 8 responses to “What is the Social Security Tax?” IAM 88 YEARS OLD AND MOST LIKELY WILL LIVE TO IOO I INVEST IN THE STOCK MARKET TO SUPPLEMENT MY SOCIAL SECURITY SO I CAN AFFORD TO DO SO. OBVIOUSLY I AM RETIRED. SO WHAT CATEGORY DO I FALL UNDER ? IT SEEMS THEY SHOULD’ AT LEAST NOT TAX MY SOCIAL SECURITY!!! IT’S LIKE PAYING TWICE & RETIRING TWICE!! CRAZY CRAZY IF I CAN’T CONTINUE WHAT DO I DO BEG IN FRONT OF THE WHITE HOUSE???? LET ME KEEP MY MONEY. THERE SHOULD BE A CUT OF DATE AFTER 85 NO MORE TAXES AFTER ALL HOW MANY SENIORS ARE WORKING AT 88. 88!! Reply I do not understand this, social security taxes are assessed on wages up to a maximum amount of $106.800. How would this affect a person making a much higher salary than the $106,800. Reply That is a very interesting chart. I did not realize that some people are exempt from paying social security. I thought that was a mandatory thing. Reply The Nation’s most absurd tax. Firstly, it is regressive because it does not apply to incomes above the stated figure. In effect, the lower your income the higher the fraction of your income paid. Foolish. Also, the notion that workers and employers share the burden is not true. That tax becomes an implicit part of a worker’s salary and is thus ultimately paid by the worker. Secondly, because of demographics soon the system will be bankrupt. It is simply an intergenerational transfer programme. Basically, the elderly in 1937 never paid a cent of payroll tax in their lives and received an enormous windfall on their children’s backs. Now as those workers retire their retirements are funded by their kids, but they are so numerous that the burden is onerous on the new generation of workers. Thirdly, exemptions for religious workers. That’s not fair, people who are not of faith (effectively) subsidizing those who are. The real answer is contributory plans where each person saves (perhaps the amount of the payroll tax) and invests it how he or she likes and lives off that when they retire. This paternalistic programme is unfair and restricts people’s control over their own lives. Cool graphic though. Reply Yes, except for the reversing of amount paid out and amount collected. You might want to correct that. Reply I ttlolay agree with this above comment, the world-wide-web is with a doubt growing in the most necessary medium of communication across the globe and its due to sites like that that ideas are spreading so quickly. Reply According to the social security administration site, you have your paid out and paid in figures reversed. According to them, the social security program currently has a surplus of 2.5 billion, not a deficit. http://www.ssa.gov/history/tftable.html Reply Wow, this really makes a lot of sense dude. Reply Leave a Reply Cancel reply
IAM 88 YEARS OLD AND MOST LIKELY WILL LIVE TO IOO I INVEST IN THE STOCK MARKET TO SUPPLEMENT MY SOCIAL SECURITY SO I CAN AFFORD TO DO SO. OBVIOUSLY I AM RETIRED. SO WHAT CATEGORY DO I FALL UNDER ? IT SEEMS THEY SHOULD’ AT LEAST NOT TAX MY SOCIAL SECURITY!!! IT’S LIKE PAYING TWICE & RETIRING TWICE!! CRAZY CRAZY IF I CAN’T CONTINUE WHAT DO I DO BEG IN FRONT OF THE WHITE HOUSE???? LET ME KEEP MY MONEY. THERE SHOULD BE A CUT OF DATE AFTER 85 NO MORE TAXES AFTER ALL HOW MANY SENIORS ARE WORKING AT 88. 88!! Reply
I do not understand this, social security taxes are assessed on wages up to a maximum amount of $106.800. How would this affect a person making a much higher salary than the $106,800. Reply
That is a very interesting chart. I did not realize that some people are exempt from paying social security. I thought that was a mandatory thing. Reply
The Nation’s most absurd tax. Firstly, it is regressive because it does not apply to incomes above the stated figure. In effect, the lower your income the higher the fraction of your income paid. Foolish. Also, the notion that workers and employers share the burden is not true. That tax becomes an implicit part of a worker’s salary and is thus ultimately paid by the worker. Secondly, because of demographics soon the system will be bankrupt. It is simply an intergenerational transfer programme. Basically, the elderly in 1937 never paid a cent of payroll tax in their lives and received an enormous windfall on their children’s backs. Now as those workers retire their retirements are funded by their kids, but they are so numerous that the burden is onerous on the new generation of workers. Thirdly, exemptions for religious workers. That’s not fair, people who are not of faith (effectively) subsidizing those who are. The real answer is contributory plans where each person saves (perhaps the amount of the payroll tax) and invests it how he or she likes and lives off that when they retire. This paternalistic programme is unfair and restricts people’s control over their own lives. Cool graphic though. Reply
Yes, except for the reversing of amount paid out and amount collected. You might want to correct that. Reply
I ttlolay agree with this above comment, the world-wide-web is with a doubt growing in the most necessary medium of communication across the globe and its due to sites like that that ideas are spreading so quickly. Reply
According to the social security administration site, you have your paid out and paid in figures reversed. According to them, the social security program currently has a surplus of 2.5 billion, not a deficit. http://www.ssa.gov/history/tftable.html Reply
