According to the Social Security Administration, 50 percent of all wage earners in the U.S. had net compensation less than the median wage, estimated to be $27,520 a year (meaning, half earn more, half earn less).
About 95% of all wage earners in the U.S. (whose only income was earned by regular hourly wages or salaries) earned less than $113,700 a year --- which is the maximum cap for paying Social Security taxes (anything over that is Social Security tax-free). Meaning, even members of Congress do not have to pay this tax on 100% of their $174,000 annual congressional salaries.
Those whose only earnings are from capital gains earned in the stock market (usually those in the top 0.01% income bracket) pay NO Social Security taxes all, because the current tax code exempts capital gains from any Social Security taxes.
For example: Last year Facebook's Mark Zuckerberg had a total compensation of $2.27 billion, but his base salary was only $503,205 (because the vast majority of his enormous pay package came from exercising Facebook stock options.)
The current tax code allows Zuckerberg to only pay Social Security taxes on his first $113,700 of regular salary. He would also pay a very low tax rate on the remainder of his enormous pay package earned from his capital gains (earned from his stock options) --- a lower tax rate than what Warren Buffett's secretary would have to pay in federal income tax on her regular wage.
And for the last few years, the stock markets have soared into the stratosphere, setting several all-time records this year alone --- all while the REAL number of unemployed Americans has grown.
DEAN BAKER: December 23, 2013
ReplyDelete"Congress and the president have decided to craft budgets that lead to tens of millions of people being unemployed or underemployed...High levels of unemployment put downward pressure on workers' wages, especially those in the bottom third of the labor force. This means we have a federal budget that limits growth and employment in a way that redistributes income upwards. There is a much longer list of ways in which the government has acted to redistribute income upwards over the last three decades..."
http://truth-out.org/opinion/item/20803-inequality-government-is-a-perp-not-a-bystander