9 - Thus, the social security tax rate is 6.2% (12.4% if...

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Explain what is meant by regressive tax. The social security tax is considered a regressive tax. Why? Answer: A regressive tax rate is one where the tax rate decreases as the tax base gets larger. The social security tax is assessed on the first $97,500 of wages (in 2007).
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Unformatted text preview: Thus, the social security tax rate is 6.2% (12.4% if self-employed) on the first $97,500 of wages and 0% on wages above $97,500....
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This note was uploaded on 09/16/2011 for the course ACCOUNTING 145 taught by Professor Eric during the Spring '11 term at Palm Beach Community College.

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