030930 H1B visa holders may not have to pay social security tax soon

The Economic Times ^ | 030930 | JAMES MATHEW & KRISHNA KANT

[XBob]

030930 H1B visa holders may not have to pay social security tax soon
2003-09-30
13:01:53




The Economic Times
Tuesday, September 30, 2003| Updated at 21:36 hrs IST

http://economictimes.indiatimes.com/cms.dll/html/uncomp/articleshow?xml=0&artid=25500046&sType=1

H1-B visa holders may not have to pay social security tax soon
JAMES MATHEW & KRISHNA KANT

TIMES NEWS NETWORK[ FRIDAY, OCTOBER 18, 2002 12:55:44 AM ]
NEW DELHI: There is good news for all those who are there in the US on a H1-B visa. India is close to signing the administrative protocol with the US on abolishing social security tax charged by the US administration on those H-1B visa holders.


The administrative protocol is the first step towards India being able to sign the final agreement with the US government on the withdrawal of the tax on large number of Indians, estimated to be about 60,000 to 70,000 at any point of time, on short-term employment visas in the United States.


The waiver on the tax-charged currently at the rate of 17% to 21.5% of their total salaries-could result in savings of billions of dollars annually. A person has to work for at least 10 years in the US to take full benefits from his social security taxes. H1-B visa on the other hand is for a maximum period of six years.


According to sources, the ministries of external affairs, finance, labour and commerce have already agreed on the draft agreement on the protocol to be signed with the US.


After the signing of the protocol it has to be ratified by the two countries before the two governments start negotiations on the final agreement. From the Indian side, the ministry of labour is the nodal agency for the negotiations on the final treaty to be signed between the two countries. US has a similar agreement with 20 other countries, including Germany, the UK and Japan.


For the US to waive social security taxes, the domestic country should have a social security system. Indian officials in their negotiations with their US counterparts have pointed towards the existence of social security benefits like employee provident fund, Employee State Insurance medical facility and limited unemployment benefits in India.


Besides directly benefiting engineers, who form the largest chunk of H1-B visa holders, the agreement would benefit students, academicians and other professionals on short-term deputation.


The matter has seen hectic parleys between the various industry chambers and the government. The Indo-American Chamber of Commerce, a bilateral chamber, is particularly lobbying hard with both the governments for an early signing of the final agreement between the two countries.

[XBob]

the crash is coming - the system has about 5-10 more years before it crunches

[CO_dreamer]

Oh, good, just what we need. Yet another excuse for US employers to fire US employees and hire H1B visa workers.

[Lazamataz]

Oh, good, just what we need. Yet another excuse for US employers to fire US employees and hire H1B visa workers.

Brought to you by Dubya.

WTF is wrong with this complete a-hole.

I'm sorry I voted for him.

[Jack Wilson]

Brought to you by Dubya. WTF is wrong with this complete a-hole.

You don't really think presidents manage at this level of detail , do you?

[Lazamataz]

You don't really think presidents manage at this level of detail , do you?

Whether or not they do, he sure better whack the weenie of the Government Drone that approved this.

But he won't.

That's because he's on board.

[Lazamataz]

Just great. I think I'll stay home and not vote next election.

I'm voting Libertarian, I guess. They are whackjobs in some regards -- war on terror for example -- but they believe about 60% of what I believe.

And at least they won't directly, personally screw me like the Republicrats do.

[The Old Hoosier]

This is rich. Now employers will be falling all over themselves even more to import legal, cheap, skilled labor.

How about we just abolish the payroll tax on the rest of us as well?

[proxy_user]

So what happens if an H1B visa holder becomes a green card holder, and then a citizen? Many of them do. How could they pay this tax retroactively?

Maybe we can give them a choice: you don't have to pay the tax, but then you CANNOT become a permanent resident. I'll bet many of them would elect to pay.

[Viva Le Dissention]

As an aside, I think most Libertarians would approve of this measure. Of course, this makes me MORE likely to vote for them...

[The Old Hoosier]

After the signing of the protocol it has to be ratified by the two countries before the two governments start negotiations on the final agreement.

Get on the phones to your senators, folks. They need 2/3 to ratify, right?

[Lazamataz]

Well then screw it. If every last party in America wants to screw us over, eff it. NOBODY gets my effing vote. Loonytarians included.

I won't give approval to all the parties looking to eff over American workers. Republican. Democrat. Loonytarian. Xcrew y'all then.

[Viva Le Dissention]

No one is looking to "eff over" American workers.

Without going into a lengthy discussion here, every benefits from free trade, and in this particular issue, why should people pay into Social Security if they are never going to reap the benefits of the system?

I think most libertarians would take it a step further and say that the SS tax should be outright eliminated, but that this is a reasonable start.

As to jobs going overseas, what America needs to wake up and realize is that it's a done deal, and rightly so. If there are people willing to do the job cheaper elsewhere, any rational capitalist will obtain his labor at the lowest possible cost. So obviously these types of countries have a comparative advantage over the US in things like manual and low-tech labor. The answer for US workers is not to demand that the free market be regulated by the government, but to adapt to market conditions and learn skills which cannot be readily exported. There's a reason why there has been such a push in education over the past 15-20 years, and it is this--uneducated people will not succeed in the United States any longer.

Yeah, we could go back to the "old" system in which half of the people in the United States were farmers, but we would not be nearly as productive and successful as a nation than we are now. Sure, lots of farmers lost their jobs as the nature of the economy changed from agrarian to manufacturing based, and people will lost jobs as the economy shifts from a manufacturing based to a service or technology based. It's part of progress. Henry Ford single-handedly destroyed the buggy whip industry; is that a bad thing? Of course not--despite that people lost their jobs, it was a revolution that changed the way America functioned. We will adapt. If not, we will fail. Either way, we will meet our proper fate.

[ancient_geezer]

Solve the whole problem, H1b's don't pay the tax, neither should anyone else!!!

H.R.25
SPONSOR: Rep Linder, John (introduced 01/7/2003)
A bill to promote freedom, fairness, and economic opportunity by repealing the income tax and other taxes, abolishing the Internal Revenue Service, and enacting a national retail sales tax to be administered primarily by the States.
Refer: http://www.fairtax.org & http://www.salestax.org

Gets rid of the all income & payroll taxes and replaces them with a singe tax paid by everyone at the same rate, no witholding, no exceptions, no exemptions paid at the retail register and nowhere else.

Thomas Hobbes from Leviathan

• It is fairer to tax people on what they extract from the economy, as roughly measured by their consumption, than to tax them on what they produce for the economy, as roughly measured by their income

[Lazamataz]

Without going into a lengthy discussion here, every benefits from free trade, and in this particular issue, why should people pay into Social Security if they are never going to reap the benefits of the system?

I always considered it an H1-B tax.

[Mr Crontab]

>but to adapt to market conditions and learn skills which cannot be readily exported

"Do you want fries with that?"

>Henry Ford single-handedly destroyed the buggy whip industry; is that a bad thing?

Except we're not eliminating an obsolete technology...

[kenth]

The argument that we will adapt is getting a little old. When we've come down to service jobs being outsourced, what is going to be left?

[Swanks]

I too am sorry I voted for this piece-of-s**t sellout GW Bush. As mush as I can't stand Dean or Kerry I am glad Bush will be a one termer like his loser father. There is NO WAY I will vote for this clueless Globalist in '04.