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<blockquote data-quote="W. Mark Hellinger" data-source="post: 35628" data-attributes="member: 692">Re: Gibson raidedSo what are these big-assed LOOPHOLES for the &quot;wealthy&quot;? I&#039;m surprised it hasn&#039;t come up yet.I&#039;ll suggest one is possibly the cap on Social Security TAX payments.First, I&#039;ll suggest that most &quot;wealthy&quot; taxpayers are self employed... one way or another.I&#039;m of the understanding that Social Security TAX is basically a flat percentage on the self employed of possibly 12.4% of taxable earnings. That means that if you make $50K inna year as a self employed individual, you will pay $6,200 in social security TAX. If you make $100K, you will pay $12,400 in social security TAX. However, there is a cap. If you make $106,800 inna year, you will pay $13,432 in social security TAX. If you make a billion-zillion bucks per year, you&#039;ll still only pay a max of $13,432 in SS TAX. $13,432 is the max social security TAX payment... because: Social security is paid out at a maximum rate of $674/mo. So, lets say you paid in at the maximum rate of $13,432 MOL for 20 years, invested at 10% per annum compounded... and you lived to be 70... your SS warchest at retirement age would be approx. $1M... annual payments would need to be somewhere in the neighborhood of a couple hundred grand to exhaust your SS warchest before you die... and $674/mo just ain&#039;t gonna come close.Anyhoo... once you hit your SS TAX max payment, your effective Federal tax rate drops by approx. 12.4%... dropping the &quot;wealthy&quot; from a 47.4% tax bracket to somewhere around a 35% tax bracket on the last dollar they earned (approx. a 25% tax break for the &quot;wealthy&quot;).Loophole? Sure. Is it fair? I seriously doubt I&#039;ll ever live long enough to recieve even 10% back of what I&#039;ve paid into SS TAX over the past 3 1/2 decades... much less recieve 10% of what I&#039;ve paid in considering any sort of interest on the account.</blockquote>

[QUOTE="W. Mark Hellinger, post: 35628, member: 692"] Re: Gibson raided So what are these big-assed LOOPHOLES for the "wealthy"? I'm surprised it hasn't come up yet. I'll suggest one is possibly the cap on Social Security TAX payments. First, I'll suggest that most "wealthy" taxpayers are self employed... one way or another. I'm of the understanding that Social Security TAX is basically a flat percentage on the self employed of possibly 12.4% of taxable earnings. That means that if you make $50K inna year as a self employed individual, you will pay $6,200 in social security TAX. If you make $100K, you will pay $12,400 in social security TAX. However, there is a cap. If you make $106,800 inna year, you will pay $13,432 in social security TAX. If you make a billion-zillion bucks per year, you'll still only pay a max of $13,432 in SS TAX. $13,432 is the max social security TAX payment... because: Social security is paid out at a maximum rate of $674/mo. So, lets say you paid in at the maximum rate of $13,432 MOL for 20 years, invested at 10% per annum compounded... and you lived to be 70... your SS warchest at retirement age would be approx. $1M... annual payments would need to be somewhere in the neighborhood of a couple hundred grand to exhaust your SS warchest before you die... and $674/mo just ain't gonna come close. Anyhoo... once you hit your SS TAX max payment, your effective Federal tax rate drops by approx. 12.4%... dropping the "wealthy" from a 47.4% tax bracket to somewhere around a 35% tax bracket on the last dollar they earned (approx. a 25% tax break for the "wealthy"). Loophole? Sure. Is it fair? I seriously doubt I'll ever live long enough to recieve even 10% back of what I've paid into SS TAX over the past 3 1/2 decades... much less recieve 10% of what I've paid in considering any sort of interest on the account. [/QUOTE]

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