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To: ancient_geezer
It looks like the 3% is the payment by the government into a private retirement account, on top of 1% from the employee and 1% by the employer. The SS tax would be applied to all wages (no more $90k cap) [paragraph 1, point 4].

So the net tax for someone in the top rate would go from a marginal rate of 37.9% (35% income + 2.9% medicare) to 29.7% (15.3% SS/medicare + 17% of the amount left after SS).

15 posted on 09/29/2005 1:09:44 PM PDT by KarlInOhio (We need a strict constructionist - not someone who plays shadow puppet theater with the Constitution)
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To: KarlInOhio

So the net tax for someone in the top rate would go from a marginal rate of 37.9% (35% income + 2.9% medicare) to 29.7% (15.3% SS/medicare + 17% of the amount left after SS).

The maximum marginal tax rate, using the FlatTax (tax inclusive rates) savings & investment expempt would be 14% of consumption + 15.3% (29.3%) assuming a capped (90k) wage base for SS/Medicare.

That would somewhat less with no caps on the Social Security wage base. The actual maximum marginal rate with on the total income tax version would be closer to 11% + 8.2% ~ 19.5% using current figures for SS/Medicare tax revenues as a percentage of total wage rather than capped wages.

Under a NRST tax system the maximum marginal rate would comes out something around 19-20%.

The 5 different tax reform systems covered in the study all use rebates to implement progressivity rather than exemptions or deductibility thus marginal rates are with respect to significantly different tax base than the current taxable income base of today's tax system.

I suggest you read the whole report before making guesses as to maximumum marginal rates for the proposals reviewed in the study, as the tax bases are significantly different from the current income/payroll tax system that would be replaced by any one of the five proposals (10 actually with SS refrom being making up 5 varients.)

16 posted on 09/29/2005 1:40:43 PM PDT by ancient_geezer (Don't reform it, Replace it!!)
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