lectur3-page24 - OASI We are going to focus only on OASI...

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
Yes, this can be hard to believe, so let us do a little figuring. Nothing fancy, just a little common sense figuring. First, you all do understand that the social security tax, or OASDI tax as it is currently known, is a payroll tax that you pay as a percentage of your gross wages. Your employer must match the same amount to the system that you pay. If you are self-employed, you pay twice as much as a person employed by a business or individual. Self-employed individuals do get a little break on their income taxes which lowers the net cost of their “contribution.” Oh, OASDI stands for O ld A ge S urvivors and D isability nsurance fund The true OASDI stands for ld- ge, urvivors, and isability I nsurance fund. The true retirement part of social security is the Old-Age and Survivors Insurance fund, or
Background image of page 1
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: OASI. We are going to focus only on OASI, the retirement portion of social security. Between 1937 and 1949, only the first $3,000 of gross income earned was taxed, known as the “maximum earnings taxed ” The social security tax rate back then known as the maximum earnings taxed. The social security tax rate back then was 1%. So the maximum tax any employee paid for that year was $30.00. Of course the employer contributed $30.00 as well for a total of $60.00 credited to the account. Also note, that this 1% tax covered only retirement benefits at this time. There was not a disability insurance fund (started in 1957) or a medicare program (started July 1, 1966) in existence at this time either. 24...
View Full Document

{[ snackBarMessage ]}

Ask a homework question - tutors are online