Talk:Federal Insurance Contributions Act

Second person to third person
I'm not a tax expert, so I can't expand this article very much. But I changed it from a cozy second person to a much more formal (and encyclopediatic) third person. And I added a bunch of WikiLinks. Now somebody else can come through and expand it however you see fit. Joe 01:07, 28 September 2005 (UTC)

Rate change in the 1980s
This article could benefit from some references to the history of the tax rates. Also, it might benefit from a clear statement that when people are talking about "Federal income taxes", they are almost always excluding this tax, although both are Federal and both affect after-tax income. I'll dig up the rate history. Boris B 23:41, 25 August 2006 (UTC)
 * True - I agree Morphh 00:08, 26 August 2006 (UTC)


 * I'm getting cold feet about those external links I added. Neither mentions "FICA".  I am starting to wonder if I am confusing different taxes.  If the links I added do not refer to FICA, by all means delete them.  Boris B 00:36, 26 August 2006 (UTC)

Dear editor Boris B: Both of your links are relevant. Regarding the first one, the one that links to the chart of tax rates: the tax rates under the columns for employer and employee are indeed imposed by the Federal Insurance Contributions Act (FICA). The columns for the self-employed individual relate to a separate Act of Congress, but the chart as a whole is certainly relevant to this Wikipedia article. Likewise, the second link, the one that lists various developments in the law, includes discussion of changes to the Social Security Act as well as the Federal Insurance Contributions Act, so it's relevant as well. I don't see anything wrong with the links. Yours, Famspear 01:31, 26 August 2006 (UTC)

PS: I know you're right about people usually forgetting about the FICA (Social Security and Medicare) taxes. Yes, they're technically not "income taxes," but obviously the wage earner (as well as the employer) is bitten by these payroll taxes (they're actually called "employment taxes") every time the wage earner gets a paycheck. Yours, Famspear 01:37, 26 August 2006 (UTC)

Unencyclopedic Tone
The "Advocacy and criticism" section of this article reads like a blog entry or a column in a newspaper and lacks the formal tone of an encyclopedia. Someone who is knowledgeable enough and has some time should consider reworking this section. 71.231.3.11 03:53, 18 March 2007 (UTC)


 * I agree. I'll add a "tag" to it. If you'd like to, why don't you start fixing it? — Malik Shabazz | Talk 04:10, 18 March 2007 (UTC)

Dear fellow editors: I made a stab at it, but it's just a beginning. It definitely needs work in my opinion. Yours, Famspear 04:27, 18 March 2007 (UTC)


 * I took a shot at it too. I think I cleaned it up enough to remove the banner but it needs sources.  I also think we need another sub-section on the growth and insolvency of the programs and the aspect that the taxes collected under FICA do not raise enough revenue to cover the cost of the programs.  Morphh   (talk) 13:19, 18 March 2007 (UTC)


 * Actually, FICA taxes currently raise far more than the cost of the programs, because of the 1983 increases imposed to prepare the system for the baby boomers' retirement. At the time when expenses begin to exceed tax receipts, there will be an accumulated surplus of trillions of dollars.  Under a pessimistic projection of future trends, the surplus will nevertheless be insufficient to cover all expenses, beginning a few decades from now.


 * These subjects are better addressed in Social Security (United States) and Social Security debate (United States). They don't relate specifically to the FICA tax, but to the overall program. JamesMLane t c 22:53, 19 March 2007 (UTC)

Criticism Section (and Overall Tone) are Grossly Biased
The overall tone of the article (perhaps from prior edits) and of course most specifically the Criticism section are quite biased and one-sided, forming a polemic against the hugely popular and fundamentally critical federal social welfare safety net (that almost exclusively benefits WORKING Americans and quite equitably is funded by their contributions through this tax). While not voluntary, it is about the only retirement security that many Americans can expect or will have. Someone needs to provide a more realistic perspective and some balance to this for it to be a full discussion and eludication of the topic. One might wonder whether a page explaning the tax is really a suitable place to post unbalanced opinion about its merits. — Preceding unsigned comment added by 72.164.177.58 (talk) 17:00, April 20, 2007
 * I think your too closely tying the tax to the program. Such programs could be funded in many different ways, so criticism of the tax does not necessarily mean criticism of the program.  In addition, criticism of program aspects does not mean complete removal of such a program or said benefits.  The programs themselves have their own article that can better discuss the your thoughts.  Morphh   (talk) 0:08, 21 April 2007 (UTC)
 * It's true that really most of the debate belongs in articles about the programs themselves rather than in this article about the tax that pays for them. However, I don't want to be the one to delete the criticism section here, because I think that it at least briefly points a reader toward what the issues are—then the reader can go explore them further in other articles.


 * But I really agree about the biased tone that eventually gets re-inserted when anyone tones it down. People who grew up long after the Great Depression became history often can't even wrap their heads around the idea of what life would in fact be like if Social Security and Medicare didn't exist. For example, this sentence from the article: "The lack of insurance and retirement money arguably leads to poverty" (emphasis mine). (An earlier version even tried to euphemize "poverty" to "financial stress".) The idea of it being "arguable" is strange. For many to most working-class people in the U.S. (we are talking millions, not thousands), the only long-term disability insurance that they have is Social Security. For many of those same people (we are talking millions, not thousands), Social Security is somewhere between most and all of their monthly income after they retire. Of those populations, consider (1) the ones who become disabled through injury (e.g. bad car accident) or illness (e.g. intracranial AVM that goes bad) while young or middle-aged and (2) the ones who don't die soon after retiring, but rather keep living for a decade, or two, or even three. Now add retarded adults whose parents (being older, of course) die before they do. How would any of the above people not be impoverished without Social Security? Who would be paying for their rent/mortgage, electricity, telephone, transportation, food, clothing—let alone healthcare? Seriously, a lot of the "arguable" crowd live in posh suburbs where they seldom even see an elderly poor person or a retarded adult, and they literally forget that such people even exist (except as abstract ideas on television). Thus they find the need for social insurance "arguable". — Lumbercutter 21:16, 9 June 2007 (UTC)

Dear Lumbercutter: Actually, I think I'm the one who added the word "arguably" -- in an effort to make the sentence more correct. I'm in favor of Social Security. I changed the sentence because I assumed (incorrectly) that it would be obvious that the mere lack of insurance and retirement money does not necessarily lead to poverty. Indeed, as you pointed out there are lots of rich people. That supports the statement that it is "arguable" that the lack of retirement money and insurance leads to poverty. Billionaires don't need "retirement money" or a retirement plan of any kind, much less "insurance," in order to have a comfortable retirement. Also, I don't consider the investment portfolio of a billionaire, or the wealth with which the child of a billionaire is born, to be "retirement money" -- although that billionaire or his child probably will have lots of it to spend at the time of retirement. I think of "retirement money" more narrowly -- in the sense of money or other investments that are actually in a retirement plan, such as an IRA or a 401(k).

Anyway, I see what you mean. The language is still problematic, even after my editorial attempt to clarify it. Stay tuned. Yours, Famspear 21:49, 9 June 2007 (UTC)


 * Ah, I see your point there—of course it is true that the lack of, for example, disability insurance doesn't lead to poverty for a wealthy person who becomes disabled. And that's also true for non-wealthy people who are simply lucky and never need to make a claim. More precisely, a lack of insurance would lead to poverty only in those people who were non-wealthy and suffered disability. But within that group, the poverty would be predictable and deep. (This would be in a hypothetical world without Social Security). I thought that various editors during the last round of revisions were denying the predictability involved with that latter group or downplaying the depth of the poverty. Maybe that's not in fact what they were trying to say. — Lumbercutter 03:22, 10 June 2007 (UTC)

Inaddition to all the good points brought up above, such as the biased nature of the article, which I was originally going to address, I think it also needs citations to the content to prove the opinions expressed actually exist and by whom. In the sections current form, the parties are merely listed as "some people". This borders on weasel words at best. —Preceding unsigned comment added by Mkow88 (talk • contribs) 16:28, 9 November 2008 (UTC)

Do you need sourcing for a negative statement?
Dear readers: An anonymous editor has removed this verbiage:


 * Strangely, they do not seem to be explained anywhere in the IRS's online help

The deletion was made with the statement that one would need to support the claim.

I agree that the text should be deleted, but not for the reason given. Now, for a little hair splitting.

The above statement is a negative statement. In certain cases, I would argue that you do not need a citation to support a negative statement.

For example, suppose I say: "There is no report on page 1 of the May 1, 2007 New York Times stating that little green men from the Planet Mongo landed at second base at Yankee Stadium in New York City and began dancing the Twist to the music of Chubby Checker."

That's a silly example, but I would argue that I do not need "sourcing" or a citation for that statement. All anyone needs to do to refute the statement is to obtain the relevant copy of the New York Times and check page 1. If there is such a report on page 1 of the Times, then my statement is incorrect. If there isn't such a report, then my statement is correct.

There is probably no way to "source" or obtain a citation for the statement that "Strangely, they do not seem to be explained anywhere in the IRS's online help". Either "they" are explained in the online help, or "they" are not.

I would argue that the reason the statement should be deleted is that it seems POVish and (in my opinion) detracts from the article more than it adds to the article. Yours, Famspear 21:56, 2 May 2007 (UTC)

Post-script: Also, I agree with the anonymous editor that it is not "strange" that the matters in question are not explained on the IRS web site. There are gazillions of important things about U.S. Federal tax law that are not explained on the IRS web site. Famspear 22:00, 2 May 2007 (UTC)


 * In fact, it is explained on the IRS website, and I just added a reference to it. (By coincidence, I had added the IRS reference to Social Security (United States) last week.) — Malik Shabazz | Talk 22:10, 2 May 2007 (UTC)


 * Wait a minute -- that means the statement really should have been deleted because it was just plain incorrect! How boring! Seriously, thanks to editor Malik Shabazz. Famspear 22:22, 2 May 2007 (UTC)

Tone
I normally stick to science/fact articles precisely because politics on Wikipedia is a fruitless endeavour. But this article does have that 'neo-con'/'supply-side'/'reaganite' feel to it. Namely no hard fact that supports the FICA tax/Social Security is left uncountered, even when the counter is a unencyclopedic, weasly worded, mealy mouthed, conservative talking point.

One that that stuck out is that the tax is most definitely regressive. A person with an income over the maximum amount pays the same amount (not percent) if they make 100k, 500k, or 10 billion. One can argue weather the Social Security payouts are progressive, but the tax itself is absolutely regressive.

A few of the conservative talking points are actually correct, namely that if one were free to invest one's own money privately then on average one would receive more interest.
 * But even that statement is misleading, England (and Brazil or Argentina, can't remember which) both had mandatory savings accounts, but because neither was well regulated millions of people lost vast amounts of their retirement savings to unscrupulous private companies.
 * Despite the comparisons to mandated insurance / retirement savings, it is really just a welfare program. This artificial linking of working and paying in, to benefits received was just one of the selling points at it's inception because Americans have such a aversion to 'welfare'.
 * Because it is 'wellfare' and no true insurance / retirement savings plan, it moderately redistributes from the higher income brackets to the lower brackets, but because it is so regressive it is barely bourne (percent wise) by the very rich, and instead is almost totally funded (percent wise) by the lower and middle classes.
 * Tiki God 17:03, 27 July 2007 (UTC)

I with some of Tiki God's points, especially about weasel words and the confusion of the tax side and the benefit said. I have added some citation tags. Famspear 23:36, 27 July 2007 (UTC)


 * I agree with Tiki God's points about the tone of the article, but...


 * Social Security is an income redistribution program, not a welfare program. The difference is that benefits aren't distributed on the basis of need.
 * Social Security is also a social insurance program. Ask a worker collecting disability benefits, or the family of a deceased worker who are collecting survivors benefits.
 * The concept of "interest" applied to Social Security is a red herring because one cannot calculate the "interest" on a social insurance program.
 * You may be thinking of Chile, which has had an individual account system for many years. It has been (and still is) touted as the be-all and end-all by free-marketeers for the past two decades, but as Chileans have begun to retire under the new system they are learning that their accounts have been eroded by high fees and "misplaced" deposits. In the last presidential election, Michelle Bachelet beat Sebastián Piñera, the brother of José Piñera — the architect of the Chilean social security system. I can't help but wonder if Piñera's brother was a factor in the election.
 * Overall, considering both the payroll tax and the benefit structure — which replaces 90% of the lowest earners' pre-retirement income — Social Security has been shown to be a progressive program. 'll try to dig up some links that make that argument for the article. — Malik Shabazz (Talk | contribs) 04:02, 28 July 2007 (UTC)

I guess I am a mealy mouthed conservative and agree with almost all of the article. In fact I believe that this program is one of the absolute worst in terms of generating long term fairness for Americans. However, I find this article's tone to be a bit much. It does not read like an encyclopedia entry at all. It does read like a (bad) professor's first year criticism of Social Security (if such a course were offered). Certainly we can do better. DannyJohansson 13:49, 13 August 2007 (UTC)

Both this article and the article on Social Security make a big point of airing a criticism that the tax is "regressive" while not giving equal play to the point that the benefits are "progressive" and in fact the net outcome is highly "progressive" (so if anything the "progressive" argument should be more prominent). Social Security payouts reduce as income increases such that someone who earns twice the income and pays twice the tax gets far less than twice the benefit. Furthermore, the criticism of the tax cap ($102,000 in income for 2008) is ludicrous because payouts are only calculated based on taxed income. That is, someone who makes $102,000 in 2008 and whatever the number is every other year pays the same dollar amount in taxes as someone who makes $1 billion per year, but these two also get exactly the same payout. Pay the same; get the same - doesn't sound regressive to me. The fact that no additional benefit is earned based on income over the cap AND income below the cap is taxed at a flat rate and benefitted at a highly progressive rate should be noted as an effective counter-argument to the "regressive" allegations.

Finally, the risk of dying before getting benefits applies to everyone and is not regressive.

If the "regressive" criticism is worthy of its own headline, then the "progressive" counter deserves equal play as its own section. Shamanix (talk) 04:45, 8 April 2008 (UTC)


 * Good points Morphh   (talk) 19:49, 08 April 2008 (UTC)
 * The tax itself is not progressive. Only the benefits.  Therefore, the program as a whole can be progressive, but still not the tax.  This is an article on the tax, and information on the Social Security program as a whole should probably go in the article on Social Security.  Jbo5112 (talk) 01:11, 25 March 2012 (UTC)

Since no one can provide a citation in 7 months time to verify that my Social Security taxes will be repaid to me with interest (my calculations say no, but I could be wrong), I vote that the paragraph on Social Security being progressive be removed. There were two cited sources to refute claims of Social Security being regressive. The second one never mentions anything that I can find about the system as a whole being progressive, just the benefits. I could find nothing to address the issue that the tax could be more regressive than the benefits are progressive. While such information might be relevant to a discussion of the Social Security system as a whole, it would still be off topic for FICA tax itself, and has therefore been removed instead of just cited as having different information. The first source, the CBO, operates as an agency the legislative branch of the federal government. The legislative branch legislates levels for taxes and benefits for the program the CBO is calling progressive. This is not a third party source, but instead, no matter how honest the figures may be, they are organizationally closer to a corporate marketing department for a finance group. While one can verify that the CBO made the statement, without being a third party, they should not on their own be considered a reliable source for such facts. Unless someone has better sources or valid objections I will remove the paragraph, since having a side of a debate without verifiable facts is of no value. At that point the section title should probably have the word debate removed, since it will just be a one sided argument. Any suggestions on how long I should wait? A week? A month? Longer? Jbo5112 (talk) 01:11, 25 March 2012 (UTC)


 * I don't understand what "payroll taxes plus interest" has to do with the progressiveness of the Social Security system. — Malik Shabazz Talk/Stalk 01:20, 25 March 2012 (UTC)
 * I see that the article makes the same assertion. The Economist, citing work by the NBER, says "low earners earn a 5.19% internal rate of return on their contributions to Social Security, while high earners get just 0.54%". I guess that's a different way of saying the system is progressive. — Malik Shabazz Talk/Stalk 01:38, 25 March 2012 (UTC)

Self Employment tax and FICA
I made some corrections to the article. The Self-Employment tax consists of Social Security tax and Medicare tax. The FICA tax also consists of Social Security and Medicare tax.

However, the Self-Employment tax is NOT an FICA tax.

The Self-Employment tax is imposed under the Self-Employment Contributions Act of 1954, which is codified as Chapter 2 of Subtitle A of the Internal Revenue Code. The FICA tax is imposed under the Federal Insurance Contributions Act, which is codified as Chapter 21 of Subtitle C of the Internal Revenue Code. It can be confusing, because BOTH Acts impose the Social Security tax and BOTH Acts impose the Medicare tax. The "SE" Act imposes those taxes on self-employed individuals (independent contractor individuals) while the "FICA" imposes those same taxes on employees.

The SE tax is NOT an FICA tax. But the SE tax and the FICA tax both have both Social Security tax and Medicare tax components. Yours, Famspear 19:26, 17 August 2007 (UTC)

Section 218 Agreement
This article could be improved by some discussion of Section 218 Agreements. Thanks  Morphh   (talk) 14:06, 30 March 2008 (UTC)

Is the Social Security benefit "directly tied" to the tax paid?
Need to determine whether the statement near the beginning of the article is technically correct. Is the benefit tied to the TAX paid by the worker, or is it tied to the compensation on which the tax is imposed???? The net effect is roughly the same either way, as the amount of tax in any given year is simply a percentage of the Social Security wages for that year. But if the statute provides that the benefit is based on the covered compensation, then the "tie" between benefits and the tax itself is technically an indirect one, not a direct one. I'll try to check on this.... Famspear (talk) 22:46, 30 November 2008 (UTC)

Definition of "gross income" needed
The article states a few times that FICA is based on gross income, but does not define gross income. It's important because some deductions of true gross income seem to be allowed to get to what I'll call FICA gross income. For instance I work for the state of California and have a payment that partially reimburses for health care insurance. The net difference, a negative amount, is added to my true gross before the FICA rate is applied. In addition, payments to Health Care Reimbursement Accounts and even Dependent Care Reimbursement Accounts are deducted from true gross income before the FICA rate is applied. So someone with deductions for daycare pays less to FICA.

I poked around a little on www.ssa.gov, trying to find their definition or calculation of earned income, but didn't get anything.

Language needs work
The following material has been moved from the article to here:


 * However, since the Social Security Act of 1935 gives the United States Congress the power to change or eliminate Social Security benefits and the United States Supreme Court decided in Flemming v. Nestor (1960) that no one has any legal right to benefits from Social Security, the payroll tax is indeed a tax.

Stay tuned.... Famspear (talk) 01:21, 19 February 2009 (UTC)

The statement that "no one has any legal right to benefits from Social Security" obviously is incorrect -- and that's not what the Court ruled in Flemming v. Nestor. If people had no legal right to benefits, then any government employee could simply withhold the benefits from a participant, and that participant would have no legal recourse. I think what the editor may have meant to say was that the legal right to benefits is a statutory right, not a property right. Stay tuned..... Famspear (talk) 01:26, 19 February 2009 (UTC)

OK, I restored the language to the article in corrected form. I also made a few minor tweaks. The article still needs work.

I (or someone else) needs to check on the direct-indirect issue: Is the Social Security benefit tied to the amount of Social Security WAGES or, alternatively, to the amount of Social Security TAX? The net effect should be roughly the same, since the higher the Social Security wage, the higher the tax -- but if the BENEFIT is tied directly to the WAGE, then the tie from benefit to the tax is really only (arguably) "indirect." Kinda splitting hairs a bit..... Famspear (talk) 01:53, 19 February 2009 (UTC)

"Role of Government"
There's been a lot of talk about NPOV or lack of sources or whatever else about this section but almost none about what seems to me to be the very obvious and significant problem with it: it's just not relevant. Lots of people have lots of criticisms of Social Security and/or Medicare, but information about those criticisms is only relevant to this article *in so far as it pertains to FICA*. For example, the regressivity discussion is relevant because FICA taxes are more regressive than the federal income tax. Discussions of the proper role of government and the importance of individual choice have nothing to do with the particular revenue streams these programs are funded by. If no one either convinces me otherwise or edits the content to relate it in some reasonably convincing way to the article topic, I'll go ahead and delete this material. Anyone who so desires (not me) should feel free to incorporate it into the articles where it would actually be on topic, namely those for the programs, rather than the tax which supports them. Nicolas Bray (talk) 15:59, 18 April 2009 (UTC)

This article is seriously mistaken about the way the USA worked before the 1935 SS Act.
The following part of the entry is historically ignorant and amounts to editorializing. My comments are interleaved.

Prior to the Great Depression, the following presented difficulties for working-class Americans:


 * The U.S. had no federal-government-mandated retirement savings; consequently, for those people who had not voluntarily saved money throughout their working lives, the end of their work careers was the end of all income.

ME. Old age was then not the economic disaster you imply it was. People rarely starved or died in unheated residences or on the street. Before Social Security, retirement as we know it was uncommon; most people worked until their health broke down. Given the state of medical knowledge at that time, the incapacitated elderly usually did not live all that long. Those who did retire were often supported by their adult children, younger siblings, or nephews/nieces. There was a stronger sense in those days that one was expected to support one's next of kin. Cities and counties ran poorhouses. This system broke down because the Great Depression badly stressed household budgets, so that the middle aged sometimes came to see their elderly parents as a burden.

In those days there was a network of private charities for the indigent, financed by the wealthy and often run by church denominations. Many of these charities went out of business because of the Depression and WWII. By the 1950s, it was clear that the economic support of the indigent had been socialised by Social Security and by AFDC.


 * Similarly, the U.S. had no federal-government-mandated disability income insurance to provide for citizens disabled by injuries (of any kind—work-related or non-work-related); consequently, for most people, a disabling injury meant no more income (since most people have little to no income except earned income from work).
 * In addition, there was no federal-government-mandated disability income insurance to provide for people unable to ever work during their lives, such as anyone born with severe mental retardation.

ME. This overlooks the creation of workman's comp for workplace injuries, starting in Wisconsin in 1911. Manual jobs in those days not infrequently resulted in crippling injuries. In fact, "retirement" often came about because of a crippling injury. When that happened, one was often supported by one's adult children.

Again, the network of family ties that took the sharpest edge off of elderly poverty also did likewise for workplace or congenital disability. In particular, healthy siblings were expected to take in congenitally disabled siblings.


 * Further, the U.S. had no federal-government-mandated health insurance for the elderly; consequently, for many people, the end of their work careers was the end of their ability to pay for medical care.

ME. Medical care was much cheaper in those days, because all that could be done in many cases was to administer morphine for pain and let nature take its course. Cities had general hospitals that treated the indigent for free. More generally, all of American health care in those days was run on an ability to pay basis. It was common before the Depression for doctors to charge little or nothing to the common run of patients, and to earn his living by what he charged middle class and wealthy patients. In those days, health care was much cheaper because doctors and nurses were far less well off relative to others than they became after WWII. Very few drugs existed, and those that were available did not cost much.

Medicare was created in 1965 because the post WWII technology explosion led to an exponential rise in health care costs for all. Job related health benefits covered the cost for the working. Medicare was created so that those used to health benefits during their working years could continue to enjoy some sort of coverage while they were retired.


 * Finally, the U.S. had no federal-government-mandated health insurance for all those who are not elderly; consequently, many people, especially those with pre-existing conditions, have no ability to pay for medical care.

ME. This sentence overlooks the creation of Medicaid in 1962, and the fact that hospitals cannot legally deny emergency care to a patient who is unable to pay for it. Medicaid outlays will soon reach US$1 trillion/year.

The creation of social insurances in the USA over the course of the 20th century did not simply fill a vaccuum, as this entry implies, but instead replaced earlier norms of some free medical care for the indigent, and of economic support by extended families, private charities, religious denominations, and county governments. Social insurances were enacted because the Great Depression badly stressed this system, and because of the exploding cost of health care post WWII.

On the history of old age income, see the work of Dora Costa. On the history of American health care, see the work of Paul Starr. —Preceding unsigned comment added by 111.69.246.46 (talk) 18:44, 16 October 2010 (UTC)
 * I have added an Unreferenced section tag to the history section. Note that I disagree with most of the above comments. The history is in line with direct experiences of my great grandparents' generation. I suspect the first three items in the history section may be gleaned from legislative history and newspaper accounts in the 20s and 30s. I'll leave that to the historians; I'm a tax guy. Oldtaxguy (talk) 04:48, 8 December 2010 (UTC)
 * I have added an Unreferenced section tag to the history section. Note that I disagree with most of the above comments. The history is in line with direct experiences of my great grandparents' generation. I suspect the first three items in the history section may be gleaned from legislative history and newspaper accounts in the 20s and 30s. I'll leave that to the historians; I'm a tax guy. Oldtaxguy (talk) 04:48, 8 December 2010 (UTC)

History of Federal Insurance Contributions Act tax
or "Why America needs socialism". The above discussion notes the content is unreferenced but also presents it it all in terms of "difficulties" for which the remedy is "federal-government-mandated" programs as its non-neutral point of view contrary to WP:NPOV. This section needs to be replaced with the Act's actual history attributed to a source in a neutral way. patsw (talk) 16:45, 12 March 2011 (UTC)

Overlap of articles
There's quite a bit of overlap between this article and Social Security (United States). Suggestions? Oldtaxguy (talk) 04:49, 8 December 2010 (UTC)


 * The social security article should have a summary style structure pointing to this article for the aspect of taxation. Since FICA covers more than SS, I can't see merging this into that article.  Since SS covers more than FICA, I can't see merging that one into this article.  The content on taxes should be merged into this article though, then a summary of the SS portion placed on the SS article with a main tag pointing here.  Morphh   (talk) 18:07, 8 December 2010 (UTC)

Deletion of material not from reliable sources
I have deleted opinions from political advocacy websites and the NY Post as not meeting the reliable sources criteria. I have also deleted a misinterpretation of a Supreme Court case denying Social Security benefits to a nonresident alien who had been deported. Oldtaxguy (talk) 20:01, 28 July 2011 (UTC)


 * I think you made the right call. I deleted it yesterday as original research, but I hadn't paid attention to the sources. Not reliable sources at all. — Malik Shabazz Talk/Stalk 03:34, 29 July 2011 (UTC)

It's not a TAX.......
This entire thing is based on the idea that FICA is a tax. It is not, the I stands for insurance not tax. It is too often treated as a tax but officially it is insurance and has never been a tax. Show me the where it is a tax!

71.105.163.166 (talk) 23:28, 22 December 2011 (UTC)


 * Sorry, but it's a tax. Read the article. Famspear (talk) 02:21, 23 December 2011 (UTC)

Removal of reliably sourced material
The two graphs that were removed were re-added to the article. The material has clear references to reliable sources. Also, with images to see the full description and the full references you need to click on the image to get the full description page. For clarity, these references have now been placed in the description caption. Any further suggestions for improvement are appreciated. Guest2625 (talk) 23:40, 24 May 2012 (UTC)
 * I worry that the graphs may unintentionally push a pov. They quickly convey the size of the revenue collected and the regressive nature - which without proper context and balance might lead a reader to believe that low / medium income groups were being screwed.  The other half of this is the spending ledger, as the revenue is returned to those individuals multiple fold in a very progressive manner.  I'm not sure it is appropriate to so easily equate it to general revenue.   Morphh   (talk) 12:51, 25 May 2012 (UTC)


 * Generally, in the taxation articles how the collected tax revenue is spent by the government is not addressed, however, if you think that it would be useful to include information on how tax revenues are spent by the government to create balance I'm sure this numerical information could be included in the different articles. I disagree with you that the numerical information pushes a point of view. The numerical information is some of the most basic information that you can display for the FICA tax and some of the little numerical data on the FICA tax that is made available by the United States government through the Joint Committee of Taxation and Congressional Budget Office. Guest2625 (talk) 09:23, 26 May 2012 (UTC)


 * I agree that most tax articles don't include spending, but that's because they're not directly associated with a social program. We already have some content in the article regarding the spending.  My issue is that the images add weight to the argument that FICA is regressive (which the tax certainly is), without counter-weight that the program as a whole is progressive.  The Congressional Budget Office also points out that the Social Security system as a whole is progressive in the lower income brackets; individuals with lower lifetime average wages receive a larger benefit (as both a percentage of their lifetime average wage income and a percentage of Social Security taxes paid) than do individuals with higher lifetime average wages.  So it would be more balanced if an image were added to reflect the distribution of these taxes.  In addition, the combination of both employee and employer share into the employees income bracket is certainly suspect of pov.  Does the CBO make this determination that the full burden of the employer share falls to the employee?  Also, now that I think about it... the first chart looks way off.  In 2007, income taxes were 48% of revenue, payroll taxes were 38% of revenue, corporate 13%, estate/gift 1%. 2006 was similar.  You're chart shows payroll and income taxes about equal in 2006 - this is not correct.  You're chart is missing 10% of revenue!?    Morphh   (talk) 14:32, 26 May 2012 (UTC)


 * I like some other editors above don't think that a taxation article is the right place to put government spending information. The right place for such information is in the Social Security article where the outlays and benefits of the program are discussed. A tax article is a place for information about revenue collection and the intake side the government ledger. Your argument that readers will look at the two graphs and think that the middle and lower income groups are being unfairly burdened by the tax can be analogously applied to the income tax article which does not have information about government spending. A reader of the income tax article could look at the graph of the graduated tax rates and conclude that the upper income groups are being unfairly burdened by the tax, however, this assumption would fail to take into consideration the other side of the government ledger that is the return of these taxes multiple fold to the upper income groups. Where for instance one of the main expenditures of the government is on the military which monetarily disproportionately benefits the upper income groups by protecting their wealth from foreign invasion and theft.


 * If you are uncertain about any of the numerical information in the graphs just click on the images and check their full internal references. The sourcing is done quite well. The Urban Institute Tax Policy Center report whose data is used for the second graph on effective taxation rates and the similar CBO report do in fact display the payroll tax information as the total contribution of employee and employer. The data could be divided by two to get the employee's contribution, however, some editors might complain that altering the data like this would be considered original research.


 * You are right that in the first graph of government revenue that 10% of revenues is missing, however, this not because the revenue data has been altered but rather it's because only the three largest sources of government revenue were include. The graph is directly based on this graph by The Business Insider which is originally based on this report by the Joint Committee on Taxation. I'm thinking of expanding the graph to include the extra minor sources of revenue from excise, estate, gift, and other taxes, however, the 250px size of the graph might not make this possible without loss of readability. The exact information from the Joint Committee on Taxation report for 2006 and 2007 respectively is: [Fiscal year, Income taxes, Corporate taxes, Employment taxes, Excise taxes, Gift taxes, and other taxes] [2006, 43.4%, 14.7%, 34.8%, 3.1%, 1.2%, 2.9%] [2007, 45.3%, 14.4%, 33.9%, 2.5%, 1.0%, 2.9%]. Guest2625 (talk) 13:09, 28 May 2012 (UTC)

Additional Medicare Tax
The PPACA includes a provision for an Additional Medicare Tax on incomes above certain thresholds. The IRShas more detailed info. I could only find that provision on this site here. The law refers to FICA so I presume it should also be included on this page as well? Unmasked (talk) 16:11, 28 March 2014 (UTC)

It Doesn't Fund Anything
FICA doesn't fund, and never has funded, anything. It was a trick FDR used to render his New Deal programs immune to accusations of being unconstitutional. You can find this information on the official Social Security government website (http://www.ssa.gov/history/perkins5.html, http://www.ssa.gov/history/Gulick.html), and view the governments balance sheet, including all Social Security and Medicare payments, in the Daily Treasury Statements on the Bureau of the Fiscal Service government website (https://www.fms.treas.gov/dts/index.html).

The New Deal programs are funded by fiat, just like every other part of the US Federal Government. Clearly this is key information that should be included in the wiki page. 24.20.65.149 (talk) 03:30, 6 July 2015 (UTC)


 * Dear user at IP 24.20.65.149: You may want to go back and review the materials you cited and linked. By definition, all monies collected under the Federal Insurance Contributions Act (and under all other tax laws) are either spent or saved for future spending. All U.S. federal taxes are raised by virtue of a "fiat" (that is, a tax law) if you want to call the law a "fiat." What you call it is not that important in this context. The Social Security and Medicare systems might not work the way you once thought they worked, but you haven't really discovered anything new. Famspear (talk) 04:06, 6 July 2015 (UTC)


 * Your definition is completely wrong; federal taxes don't fund anything, they're receipts returning a debt to the governments balance sheet. By fiat I'm referring both to the current nature of the US dollar (https://en.wikipedia.org/wiki/Fiat_money) and the fact that the federal government is funded entirely on an as needed basis through Government Account Series, Treasury Securities issued by the US Treasury. So far this fiscal year the US government has funded itself to the tune of 51.6 trillion dollars while total federal tax 'revenue' is a paltry 3.2 trillion. The federal government is not funded by taxes. 24.20.65.149 (talk) 21:31, 6 July 2015 (UTC)

No, your definition is still wrong. Government funding happens when Congress authorizes spending for a budget. In effect they decree the money into existence, at which point the Treasury authorities the Federal Reserve to go about giving the needed money to whoever needs to be paid for whatever the specific program or service is. The money is created out of thin air as needed. There is not some big government account somewhere where tax 'revenue' is stored before being doled out to pay for things. In fact federal taxes don't even exist in any form that could be turned around and spent; they're receipts proving that a liability has been returned to the government accounting sheet. The national debt is money owed TO the US government, currency issued that is in circulation that will eventually return to the balance sheet through taxation.

All of this returns me to my original point, which is that FICA doesn't, and never has, payed for anything. No federal taxes do.

No one in this country, least of all the members of Congress, grasps how our central bank fiat currency actually works (even though people like Timothy Geithner were prompted to explain it by the Debt Ceiling nonsense, which is why that issue has quietly faded into the background). 24.20.65.149 (talk) 23:15, 13 July 2015 (UTC)


 * No, my definition is correct. All monies collected by the federal government are either saved or spent. Famspear (talk) 04:02, 7 July 2015 (UTC)


 * PS: You're comparing apples and oranges. Go back and read the material you linked. This talk page is not the proper place to debate or interpret the data. Please review Wikipedia's policies and guidelines. Famspear (talk) 04:25, 7 July 2015 (UTC)

I'm still right, and you're still wrong. No, the government is not funded entirely by borrowing. You're comparing apples and oranges, too. In the materials you linked the government did not "borrow" 51.6 trillion dollars during the year in question -- not in the sense in which you are apparently thinking. The vast majority of that 51.6 trillion was just re-financing of existing debt. Yes, the federal government is funded by both taxes and borrowing. Again, you don't seem to know how to read financial data. Famspear (talk) 04:00, 14 July 2015 (UTC)

In the material you linked, for the Treasury report for July 10, 2015, the statements shows that, year to date, the government "borrowed" about $52,594,554,000,000 (about $52.59 trillion) but retired $52,266,704,000,000 (about $52.2 trillion), for a net increase -- actual additional borrowing -- of $327,850,000,000, or about $327 billion. That is MUCH less than the $3.2 trillion in tax revenues that you cited.

Suppose I earn $100,000 a year from a job (that's revenue). Suppose I owe $500,000 on my house, owed to Wells Fargo Bank for example. If I refinance that debt during the current year, by retiring the $500,000 with a loan for $510,000 from Bank of America (and I spend the extra $10,000 on a vacation), it's silly to argue that my "spending" is somehow $610,000 for the year. That is, in essence, what you are trying to argue. You're comparing apples and oranges. Famspear (talk) 04:10, 14 July 2015 (UTC)

According to the American Presidency Project, the fiscal year 2015 receipts by the Federal government are expected to be about $3,450,200,000,000 (about $3.4 trillion), while outlays are expected to be about $4,059,900,000,000 (about $4 trillion), for a budget deficit of about $609,700,000,000 (about $609.7 billion).

You actually thought that the $51.6 trillion figure was GOVERNMENT SPENDING. That's pretty hilarious. The entire gross domestic product of the United States for 2015 is estimated to be only about $18 trillion. You were citing, as an annual "government spending" figure, a $51.6 trillion figure that is over two and half times the annual gross domestic product of the entire American economy!

This illustrates one of the reasons why Wikipedia has a rule prohibiting Original Research. Leave the financial analysis to the experts. Famspear (talk) 04:32, 14 July 2015 (UTC)


 * A government isn't a household, that's your first and biggest mistake. I never said it was funded by burrowing at all. It creates the money from scratch as needed. The 'debt' disappears because it ends up being written out of existence elsewhere in the depths of the accounting apparatus. You think it's 'hilarious' that I'm saying the federal budget vastly exceeds GDP. Of course it does; no part of the federal government is funded by taxes (state and local governments are though, since they can't create money). You want experts? Fine: http://www.amazon.com/Freedom-National-Debt-Frank-Newman/dp/1626520380, written by a former Deputy Secretary of the Treasury, and http://neweconomicperspectives.org/modern-monetary-theory-primer.html, spearheaded by professional economists at the University of Missouri-Kansas City. 24.20.65.149 (talk) 18:13, 14 July 2015 (UTC)

No, whether the government is a "household" or not is not a "mistake," and it's not "my" mistake.

You most certainly did say that the government is funded by borrowing (and you were partly correct). Specifically, you said:


 * "....the fact that the federal government is funded entirely on an as needed basis through Government Account Series, Treasury Securities issued by the US Treasury...."

The issuance of Treasury Securities is the act of BORROWING by the Federal government. You are well aware of that.

Further, you said:


 * "So far this fiscal year the US government has funded itself to the tune of 51.6 trillion dollars while total federal tax 'revenue' is a paltry 3.2 trillion."

Here, you were clearly confused, in that you compared the $51.6 trillion dollars to the tax revenues of 3.2 trillion, as if somehow you could simply add the two figures together to arrive at the amount by which the government was "funding" itself. You failed to take into account that the vast bulk of that $51.6 trillion was not new borrowings, but simply refinancing of existing debt.

You said:


 * "The federal government is not funded by taxes."

You were wrong. According to the very figures documents you linked and the very figures you cited, THE VAST BULK of the government's spending for the year you cited WAS INDEED FUNDED BY TAXES. The net borrowings in that year were only a small part of the total budget, compared to total tax revenues. You tried to make it look as though the tax revenues were teeny tiny in relation to the new borrowings, when in fact exactly the opposite is the case. Your mistake came about because of your failure to realize that most of the $51.6 trillion of "new" debt for the year was simply replacing existing debt. You compared apples to oranges, by comparing gross borrowings to tax revenues. You should have compared NET borrowings to tax revenues. THIS IS BASIC FUND FLOW ANALYSIS. TAKE A COLLEGE ACCOUNTING COURSE OR TWO.

You stated:


 * "You think it's 'hilarious' that I'm saying the federal budget vastly exceeds GDP. Of course it does."

NO IT DOESN'T. I just explained that to you, and I even gave you the actual figures. The gross domestic product of the entire American economic for a given year FAR EXCEEDS the federal government budget, the federal government spending, for that year. The federal budget mathematically CANNOT exceed the gross domestic product of the entire United States economy. Famspear (talk) 18:41, 14 July 2015 (UTC)

To repeat: the projected ENTIRE U.S. Federal budget spending for fiscal year 2015 (that is, October 1, 2014 through September 30, 2015) is expected to be about 4 trillion dollars, including the spending of both funds from tax revenues and funds from net borrowings. The gross domestic product of the entire American economy for the year is projected to end up at about 18 trillion dollars. Famspear (talk) 18:49, 14 July 2015 (UTC)

Assessment comment
Substituted at 15:01, 29 April 2016 (UTC)

External links modified
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404 page to Cornell law site
A student enrolled and regularly attending classes at a school, college, or university who performs work as a cook, waiter, butler, maid, janitor, laundress, furnaceman, handyman, gardener, housekeeper, housemother, or similar duties in or around the club rooms or house of a local college club, or in or about the club rooms or house of a local chapter of a college fraternity or sorority, are exempt from FICA tax. If the location's primary purpose is to provide room or board, however, then the work is subject to FICA tax. Performing these services for an alumni club or alumni chapter also does not qualify for the exemption from FICA tax.

[19] "26 CFR 31.3121(b)(2)-1". via Legal Information Institute, Cornell University Law School. Retrieved December 23, 2018

https://www.law.cornell.edu/cfr/text/26/31.3121%28b%29%282%29-1

The link above which is used in reference #19 doesn’t work.

https://www.govinfo.gov/app/details/CFR-2001-title26-vol14/CFR-2001-title26-vol14-sec31-3121b2-1/context

https://www.govinfo.gov/content/pkg/CFR-2001-title26-vol14/pdf/CFR-2001-title26-vol14-sec31-3121b2-1.pdf

Would one of these links work? 2600:1700:F4D1:D70:404E:8568:60F:90D8 (talk) 07:02, 30 May 2024 (UTC)

Sorry it’s 2am and I don’t edit Wikipedia enough to know what’s correct and I also don’t know anything about tax law