Hard To Beleive
Max. Tax Paid = $374.40 per employee
Plus Employer’s Share = $374.40 per employee
Total Tax Paid = 748.80 per employee
Notes:
By 1970, the tax rate had been increased, as well as the maximum earnings taxed. Employees paid a maximum of $374.40 for the year, and the employer matched this amount for a total contribution of $748.80 for the year. I hope you all realize that there is not a whole lot of money going into these folks social security accounts over this time period.
By 1991, amendments had been made to social security legislation that revised the benefit formula, changed the future age for full benefits, moved forward scheduled tax increases, and taxed the benefits of high-income households. These amendments were made because the social security system was in financial trouble primarily because not enough taxes had been collected relative to the benefits being paid out of the system.
In 1991, the social security retirement tax rate had increased to 5.53% (OASDI) with a maximum earnings taxed of $53,400. Therefore, the maximum tax paid in 1991 was $2,953.02 per employee, with a matching sum from the employer. Another 2.12% of gross income, up to the maximum earnings taxed was collected for medicare (HI or Hospital Insurance). Since 1991, the maximum earnings taxed by OASDI has continued to increase, and the HI tax no longer has a maximum earnings taxed. Every dollar of gross income is taxed by the HI program.
What will happen when those baby boomers start retiring? Will there be enough funds to take care of their retirement and medical benefits? If not, where will the money come from? These are issues you will face and must deal with.