"Michael Coburn" <mikcob@[EMAIL PROTECTED]
> wrote in message
news:ggn35k71e7@[EMAIL PROTECTED]
> On Thu, 27 Nov 2008 12:02:57 -0800, Jeff Strickland wrote:
>
>> "Mason C" <masoncXXX@[EMAIL PROTECTED]
> wrote in message
>> news:f7sti45df49kg6dvkrtbf7kgrnfk3rhfvs@[EMAIL PROTECTED]
>>> On Thu, 27 Nov 2008 10:22:50 -0800, "Jeff Strickland"
>>> <crwlr@[EMAIL PROTECTED]
> wrote:
>>>
>>>
>>>>"Michael Coburn" <mikcob@[EMAIL PROTECTED]
> wrote in message
>>>>news:gglak2624tc@[EMAIL PROTECTED]
>>>>> On Sun, 23 Nov 2008 09:29:06 -0800, Jeff Strickland wrote:
>>>>>
>>>>>> "Mason C" <masoncXXX@[EMAIL PROTECTED]
> wrote in message
>>>>>> news:pt1hi4h184638pt40eu3olcrgfhnbc8kc5@[EMAIL PROTECTED]
>>>>>>>
>>>>>>> But we must keep trying....
>>>>>>>
>>>>>>>
>>>>>> That was one weak-assed attempt at trying anything.
>>>>>>
>>>>>> Please address the salient point, should your wealthy neighbor pay
>>>>>> your retirement through FICA taxes?
>>>>>
>>>>> Most wealthy people don't pay FICA taxes.
>>>>
>>>>
>>>>That is a complete load of ****.
>>>>
>>>>Everybody that is a wage earner (is paid on a W2) pays FICA on the
>>>>first $78,000 of income, or whatever the cut off is these days.
>>>>
>>>>Everybody that is a 1099 employee pays FICA when they file income
>>>>taxes.
>>>>
>>>>Everybody is either a W2 (or W4, I forget which and don't care because
>>>>it doen't matter here) or a 1099 employee. Even the head of a
>>>>multi-million dollar company is paid by a W2, and taxes are withheld.
>>>>Consultants are paid
>>>>by a 1099. Only relatively low paid self-employed people escape these
>>>>two forms of income re****ting.
>>>
>>> "Most wealthy people don't pay FICA taxes." Isn't that true?
>>>
>>> Most wealthy people do not have *wages* -- they are not "1099
>>> employees."
>>>
>>> OK. Let's suppose that's wrong.
>>> But workers pay more FICA in pro****tion to their income. The FICA tax
>>> is regressive. The FICA tax is trivial, meaningless, pocket change
for
>>> the
>>> wealthy. The FICA tax is a killer for low-wage earners.
>>>
>>> Suspend the FICA tax to stimulate the economy. It's a quick and
>>> effective booster.
>>>
>>>
>>>
>> But FICA tax is the largest chunk of these worker's retirement. We can
>> suspend the tax, but retirement goes on. The wealthy (everybody,
>> actually) pays FICA tax to a ceiling (I forget the exact amount, but it
>> is the area of $78,000).
>>
>> For workers making this amount or less, their income is re****ted by
>> W2/W4 re****ting, or by 1099 re****ting. Except for people that take a
>> draw from their own company, this is how all income is re****ted. Even
>> dividend income from investments is re****ted by 1099. Interest you pay
>> for stuff like mortgage interest is re****ted on a 1098.
>>
>> The super-rich are still paid via W2/W4 or 1099 re****ting, but FICA
>> withholding stops when their wages reach the ceiling, and 1099 workers
>> pay at Tax Time up to the ceiling.
>>
>> FICA Taxes are Social Security. If the government stops collecting FICA
>> but continues paying SS benefits, then somebody is taking from the rich
>> and giving to the poor. That's socialism when the government does it,
>> it's charity when Robin Hood does it.
>
> Understand this: FICA taxes are paid as a consequence of WAGES ONLY.
> There is no FICA tax on other forms of income. Self employment income
is
> considered to be wages so a sole proprietor that is not incor****ated
will
> pay self employment tax which is actually a tax on wages. 1099 be
damned
> because interest income and the like are also re****ted via 1099.
>
> This is the reason there are so many one man sub S cor****ations or
family
> sub S cor****ations. Profit distributions from such cor****ations are not
> wages. They attract no FICA tax. So the "smart" people make themselves
> a sub S cor****ation and pay themselves a chickenfeed wage (like $500 a
> month) and pay the 15% total FICA tax on it. The accounting profits
> after paying the wages (a one man software company) and writing off the
> home workstation (PC system) then avoids the FICA tax.
>
> Only the poor bastards that have to suck a bosses ass and have a JOB pay
> FICA taxes. But this is the vast majority of the people. If the FICA
> tax is abandoned then the "smart" people get the weenie and the real
> producers get a better deal. The real point is that these people have
> more income to spend. And spend they will.
>
> This means that the government can choose to go into debt, or the
> government can just print money, or the government can raise the income
> taxes on the people who currently pay such taxes. Pick one or more.....
>
I am self employed, I pay FICA on my adjusted gross, that's gross income
minus costs.
I am a small business, and occasionally encounter jobs where I am paid on
a
1099. The 1099 serves to inform the government (IRS) that I made money,
and
they then check to make sure I re****t that money on my 1040, and pay self
employment (FICA) tax on that money.
In theory, I could re****t that I make $100 on a job where I got paid $250
(and did not get a 1099), and avoid paying tax on $150. The ripple effect
is
that 1.) when I'm ready to retire, my SS check will be smaller (unless I
make in excess of the FICA ceiling, and re****t my income at the ceiling
level and pay the taxes on that amount), and 2.) when I go for a loan and
show my tax returns with small numbers, I may not qualify for the loan I
want. So, I might save a few dollars on the front end, but I have problems
on the back end that I might rather not have.
But, none of your argument sup****ts the suspension of FICA as a means of
stimulating the economy, and it does not change my argument that FICA
taxes
are a direct benefit to those that pay them -- assuming Social Security
lasts long enough for people to collect after paying in for a lifetime in
the work force.
|
