On Thu, 27 Nov 2008 14:12:05 -0800, Jeff Strickland wrote:
> "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.
I see that this is fruitless. Go sit under a tree and think.
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