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Unformatted text preview: o Qualify after 5 years o Given DI ruling, get normal benefits • OASDI Taxes (FICA) o 6.2% each employer/employee up to $102,000 (2008, rises) o Self employed pay 12.4% • Is Social Security regressive? 12.4% up to 108k 0% after o Benefit only based on earnings up to $108k also, o Turns out, very progressive . • OASDI Benefit o Best way to show is through example o Benefit is based on your average lifetime earnings, adjusted for inflation and real wage growth o Benefit rises with average earnings, but at a declining rate When is a tax not a tax? • When the government takes something away from you and gives you back the same amount • Present-Value ratio INSERT FIGURE A FROM NOTES...
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- Spring '08
- Federal Insurance Contributions Act tax, Social Security Administration, Self-employment