Just learned this from the podcast I was listening to – I couldn’t believe this, so I looked this up and it’s true: Do you know that FICA is only taxed on the first $113,700 of your salary? So people that make less than $114K effectively have to pay 6.2% to FICA. But if you make more than $114K, no matter how much more, for 2013, you will not pay more than $7049.40 for FICA. Therefore, if your salary is $1mil, you are effectively only paying 0.7% of your salary to FICA. That’s NUTS! Podcast said that if they taxed all salary at the full 6.2% across the board, we would have enough money in social security to cover everybody until 2075!
I Googled this inequity and found this book title, “Take the Rich Off Welfare”. Wow!
Anyhow, I may be opening a can of worms here, but curious to know if other people knew this? And what are your thoughts about this??