I am beginning to doubt my sanity.
I can’t seem to find any papers that talk about how the payroll taxes are actually double what they seem since the money just comes out of your possible salary. Why can I only find the Free Lunch Video from Uncle Milty on youtube as the only source for this fact on the entire web?
Is this not fact? Does everyone not believe this? Don’t all economists believe this? Am I wrong? Is this a crazy Friedman idea? Do I not know how to use search engines properly?
If anyone could chime in on this with their take and/or a good link for a source, I would be thankful. For purposes of my argument a mainstream source would be nice to have in my back pocket so I don’t have to argue all of Austrian economics with my adversaries. I’d rather just blow their minds with exposing a great farce.
PS: If I am dead wrong on this concept, please tell me and do it loudly. Ignorance is the true enemy.
Are you asking if the government takes out double the amount of payroll taxes than they “officially” do on paper, or simply whether payroll taxes can provide more social security to everyone than would normally be possible if everyone were to keep the money in the first place?
Go on wikipedia. Look for “payroll taxes in the United States.” Look at the part about “employer contributions” (which employers inevitably pay by reducing the paychecks of their employees). Here, I did the work for you: http://en.wikipedia.org/wiki/Payroll_tax#In_the_United_States
The rate for SS is 6.5 or something. I pay 6.5. My employer pays 6.5 on my behalf as well.
This means my pay is 13% less than it would be if SS didn’t exist. My employer takes that 6.5 right out of my offered salary. If that tax on the employer did not exist I would make 6.5 more money. He does not care who he pays. He just wants his floor waxed and he’s willing to pay $50,000 for it. Any cost incurred on him comes right out of that $50,000.
Common knowledge, right? Wrong?
Thanks, but I am not sure I see any specific reference to what I am asking on that wikipedia page or even one linked there for
Federal Insurance Contributions Act tax. I am sure I missed it. Can you show me the quote? Sorry to be a pain. It’s just really important for me to have something in writing about this. It boggles my mind I really can’t find anything. It makes me think it is so obvious that no one bothers to mention it or it’s not widely believed. Both options scare me a little.
Well it’s common knowledge that nearly everyone gets part of their paycheck withheld for payroll taxes (Social Security & Medicare). I’m not sure how many people know that their employers are also paying the same amount in payroll taxes for keeping their workers employed. The result, of course, is lower pay to workers, as what an employer looks at is the total cost of keeping a worker, not just the wages.
I guess economic ignorance just amazes me so that I find it hard to believe it isn’t so obvious to everyone the true costs of these programs to them personally are double what they appear on all official gov’t paperwork.
Still, it seems silly that this isn’t mentioned in every single article ever written about SS + Medicare + Unemployment Insurance etc..
Thanks for your help. This website is an absolute treasure to the world. Keep up the good work.