Eliminates the taxation of Social Security benefits and the deduction for the employer -
side payroll tax.
Raises the employer -
side payroll tax rate by 6.2 %.
You could in theory eliminate the employer -
side payroll tax, just tax the employee's wages, and get the same ultimate effect.
But perhaps the most promising option, teased by a large group of tax law experts and vocally championed by prominent liberal economist Dean Baker, is for states to repeal their income taxes and replace them with employer -
side payroll taxes.
Therefore states can shift from non-deductible over-the-cap state income taxes to still - deductible employer -
side payroll taxes.
«States can shift from nondeductible over-the-cap state income taxes to still - deductible employer -
side payroll taxes,» the economists» report stated.
Not exact matches
On the fiscal
side, in 2009 the Congress and Administration enacted the largest fiscal stimulus program in history and some of these fiscal actions were renewed (e.g., extended unemployment compensation benefits) and new initiatives undertaken (e.g., the
payroll tax holiday) once it became clear that the recovery was faltering.
States usually impose income rather than
payroll taxes when raising general revenue, and levy them on the individual
side.
Think of it this way: Assuming no other
taxes and benefits, an employer paying $ 100,000 in wages has to effectively budget $ 107,650 to pay them, given the
payroll taxes on the employer's
side.
You can levy
payroll taxes in one of two ways: on the employer
side or the employee
side.
Suppose instead of a 7.65 percent
payroll tax on each
side, there was a 14.2 percent
tax just for employees.
«When it comes to a choice between
taxing what people choose to buy and
taxing work,» wrote the Deputy Prime Minister in the Independent on Sunday on 27 June, «it is liberal to come down on the
side of consumption rather than
payroll taxes.
In other words, because your wife is technically self employed, she will owe both
sides of
payroll tax which is 15.3 % of $ 38k = $ 5,800 on TOP of your federal income
tax (which is the only thing the W - 4 is instructing them about what amount to withhold).