Friday, February 8, 2019

Payroll tax

A family of four with an income of $64,000 will pay no federal or state income tax but they will pay $4,900 in payroll tax (social security and Medicare). If the goal is to help middle and low income families then reduce the payroll tax. As easy to do it is to say that the first $25,000 of earned income is exempt from payroll tax. This will save each family $1,900 per year. It is not like changing tax rates where those who pay the most get the biggest breaks as this would just be cross the board $1,900 to every one. Government officials will not like this since it doesn't send money to Washington for them to redistribute as they see fit meaning the best way to get votes.

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