Keep this quiet: Year 2002 Social Security Tax Hike (my title)

Company Payroll Dept. | 01/03/02 | Corporate

[lds23]

The Social Security Administration (SSA) has announced that the 2002 social security wage base will be $84,900, an increase of $4,500 from the 2001 wage base of $80,400. As in prior years, there is no limit to the wages subject to the Medicare tax; therefore, all covered wages are still subject to the 1.45% tax. The FICA tax rate, which is the combined social security tax rate of 6.2% and Medicare tax rate of 1.45%, remains at 7.65% for 2002.

The maximum social security tax employees and employers will each pay in 2002 is $5,263.80. This is an increase of $279 from the 2001 maximum of $4,984.80.

[lds23]

The pyramid scheme based on outdated life expectancies is doing just fine, thank you. How's your paycheck feeling lately?

[Weimdog]

Is this something we can thank Daschle for?

[freedomcrusader]

That's a 5.6% increase in the wage base. I highly doubt that wages in the U.S. as a whole rose 5.6% last year...

[Ceoman]

It goes up every year..not a surprise. I think it is an automatic increase each year. There used to be a limit on Medicare, but they discontinued this a few years ago. Perhaps someone can shed more light on this.

[Alberta's Child]

As in most cases with tax law, there are ways for small business owners to avoid paying most of these taxes while still obeying the law to the letter.

[borntodiefree]

Thank you Big Brother, may I have another??!!

[alloysteel]

The employer does not pay one cent of the payroll tax. Every bit of it is taken out of the amount set aside to pay the wages of the employee. Just a cost of doing business. The poor sod of an employee just has his take-home pay reduced by that much more

[Atlas Sneezed]

Self-employed people can incorporate and pay themselves a reasonable fixed salary, with the remainder of their business income distributed as profits, not subject to employment tax.

Note that the increasing cap is not just an increase in taxes on upper-middle earners, but is it a benefit cut for those earners who are below this line, and think themselves unaffected. They are decreasingly vested each time the cap rises.

In the 1960's my young engineer father told me that he stopped paying SS taxes about in April, and was then fully vested. Now, many or most young engineers are not even fully vested, even after paying 15% all year long. They won't get full benefits.

[newgeezer]

The recent drumbeat calling for a "tax cut for all of the people" (cut payroll taxes instead of income taxes) is more evidence that it's only a matter of time until (1) the ceiling is abolished, (2) the correlation between personal lifetime contributions and the resulting (piddly) monthly SS check disappears, and finally, (3) FICA taxes become "progressive" (from each according to his ability, to each according to his need).

As long as career politicians control the purse strings, they will manipulate them to buy the sheeple's votes. Just another day in the life of the Sheeple's Socialist Republic of Amerika.

[AmusedBystander]

Don't worry. This tax only hits the rich. (At least according to the dems)

[Alberta's Child]

Items (1) and (2) in your list may not be such a bad thing, since they would represent the closest thing this country has to a flat income tax rate. And make no mistake about it, these are INCOME TAXES we are paying. With every year that passes, we come closer to the day when the U.S. government does nothing more than fight wars, administers Social Security and Medicare, and pays interest on its debt. Even all the other nonsense like education funding, transportation projects, etc. are miniscule compared to these four budget items.

[caterco1]

Your wrong..SS is paid by employee but matched by employer...Eployers definately pay...

[hobbes1]

Yes, they pay the Government........Money they would normally pay You.... Get it?

[taxtruth]

Social Security is a government PONZI SCHEME.Tell me what investment firm would get away paying its customers less than a 2% return.None!

[freedomcrusader]

Yes, but it's only to hide the true burden of the tax from the average dumb idiot (all too common in this society). It still figures in the total cost of every employee, and the more 'costs' that the employer must pay to the gov't, the less 'costs' it pays to the employee.

[caterco1]

Get it completely....I own a large catering business and have a 2 million dollar a year payroll...trust me that I understand how the tax works...And by the way...who says that the employer would be paying that money to employee if Gov didnt take it....by my way of thinking it is a regressive emoployee tax.

[Freya]

Truly hideous. I wait each year for the tiume - that is quite a jump (5.6%). Fairly soon, I am sure, there will be no limitation at all...

[caterco1]

with you on that thought...I voted for GWB specifically to try and remedy this pile of a program.

[wjcsux]

I received my year end statement from SSI the other day. According to my statement, I have "contributed" approximately $135k (including what my employers graciously contributed instead of paying to me) since 1965. My "benefit" when I reach 62 will be around $1400.00 per month. I figured that if I could get this money, invest it at a 10% rate of return, never paying in another cent, I would have around $424k when I reach 62. The S&P Fortune 500 has averaged approximately 15% per year rate of return over the past 80 years. I would have to collect SSI for 96 months, based on what I have contributed to date, to break even. I have approximately 13 more years to work.
Isn't SSI a great retirement plan?

[mapleleafrag]

can someone explain why a homemaker, who has never worked secularly (outside of the home) in all their adult years can draw social security? i thought it was for those who paid into it previously. when i worked in gov't. housing, i also saw plenty of young (mostly minority) adults drawing off of social security with so-called disabilities (crying jags, emotional distress, back problems, etc.) who had never worked a day in their life and had gone straight from welfare to social security. please elucidate?