Changes to Social Security Tax
Everyone pays Social Security tax but only a few can skip the deduction, once they earn more than $106,800 annually. As soon as they’ve made $106,801, the 6.2 percent tax stops. For 2012, that $106,800 ceiling is going up to $110,100 and while that’s good news for those of us who don’t fall into this income range individually, wage freezes are part of almost every company these days so in effect, if you’re stuck at an annual wage of $106,801, your tax will continue—unless of course you get a raise exceeding the $110,100 minimum. The Medicare tax of 1.45 percent remains in place no matter how much money you make.
Again, I have a problem with this. Social Security tax should be much like the Medicare tax where no matter how much money you make, you need to pay—it’s not fair to pick a select group and say, “Nope, you’ve paid enough for the year, hope you make even more money next year!" If your wages put you in the over $110,000 category, you can afford to keep paying.
This is a jeer again for the SSA. I don’t expect this to be adjusted, however, because the Debt Super Committee really likes those who make the big bucks and will most likely forego any ideas that would hurt them. Why? Do the people in this category vote more? Maybe not, but they sure can afford a campaign contribution or two. I would like to see those making $30,000 or less annually have the Social Security tax waived and for those making more than $100,000 annually, instead of 6.2 percent, why not hit them up for 7.2 percent—that sounds fair, right?