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

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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
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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...
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