Social+Security+&+Medicare+Taxes

__**Payroll Taxes-**__Zachary Oatis, Dan Berger, Brian Bogart, Cory Newhard

**Social Security and Medicare taxes**
Can be offset by income tax provisions || [|12.4%*] on earnings up to $106,800 || [|12.4%*] on earnings up to $106,800 || Can be offset by income tax provisions || [|2.9%*] on all earnings || [|2.9%*] on all earnings ||
 * ~ //Social Security taxes// ||~ //2009// ||~ //2010// ||
 * Employee/employer (each) || 6.2% on earnings up to $106,800 || 6.2% on earnings up to $106,800 ||
 * Self-employed
 * ~ //Medicare taxes// ||~ //2009// ||~ //2010// ||
 * Employee/employer (each) || 1.45% on all earnings || 1.45% on all earnings ||
 * Self-employed

=**Time Line**= **August 14th 1935**  - The Social Security Act, which covered only workers in commerce and industry, was signed by President Roosevelt. **1937**  - The Federal Insurance Contribution Act (FICA) required workers to pay taxes to support the Social Security system. Taxes were collected for the first time. **1939**  - Social Security was expanded to cover dependents and survivors. **1950**  - Coverage was expanded to jobs outside of commerce and industry, and benefit levels were increased. **1956**  - Disability Insurance was created, and expanded over the following years. Early retirement at age 62 for women was permitted. **1961**  - Early retirement at age 62 for men was permitted. **1972**  - Automatic cost-of-living-adjustments (COLAs), which index benefits to inflation, were introduced. The formula to calculate increases initially overstated inflation by 25%, and people born between 1910 and 1916 received an unintended windfall. **1977**  - The mistake in the benefit formula was corrected. The "notch" refers to the difference in benefits paid to the group that received the windfall and those who retired following the formula correction. Social Security was thought to be actuarial sound. <span style="background-color: transparent; color: #000000; font-family: Arial; font-size: 12pt; font-style: normal; text-decoration: none; vertical-align: baseline;">**1983** <span style="background-color: transparent; color: #000000; font-family: Arial; font-size: 12pt; font-style: normal; font-weight: normal; text-decoration: none; vertical-align: baseline;"> - The National Commission on Social Security Reform was created in response to the actuarial unsoundness of the system. The commission called for an increase in the self-employment tax; partial taxation of benefits to upper income retirees; expansion of coverage to include federal civilian and nonprofit organization employees; and an increase in the retirement age from 65 to 67, to be enacted gradually starting in 2000. Again, Social Security was declared actuarial sound. <span style="background-color: transparent; color: #000000; font-family: Arial; font-size: 12pt; font-style: normal; text-decoration: none; vertical-align: baseline;">**1985** <span style="background-color: transparent; color: #000000; font-family: Arial; font-size: 12pt; font-style: normal; font-weight: normal; text-decoration: none; vertical-align: baseline;"> - The Social Security Trust Funds were moved "off-budget" so that the funds earmarked for the Social Security system would be tracked separately from the rest of the budget. <span style="background-color: transparent; color: #000000; font-family: Arial; font-size: 12pt; font-style: normal; text-decoration: none; vertical-align: baseline;">**1986** <span style="background-color: transparent; color: #000000; font-family: Arial; font-size: 12pt; font-style: normal; font-weight: normal; text-decoration: none; vertical-align: baseline;"> - COLAs were increased to respond to minor levels of inflation. <span style="background-color: transparent; color: #000000; font-family: Arial; font-size: 12pt; font-style: normal; text-decoration: none; vertical-align: baseline;">**1993** <span style="background-color: transparent; color: #000000; font-family: Arial; font-size: 12pt; font-style: normal; font-weight: normal; text-decoration: none; vertical-align: baseline;"> - The amount of taxable benefits for upper income retirees was increased to 85%. <span style="background-color: transparent; color: #000000; font-family: Arial; font-size: 12pt; font-style: normal; text-decoration: none; vertical-align: baseline;">**1996** <span style="background-color: transparent; color: #000000; font-family: Arial; font-size: 12pt; font-style: normal; font-weight: normal; text-decoration: none; vertical-align: baseline;"> - The Social Security Trustees' Report stated that the Social Security system would start to run deficits in 2012, and the trust funds would be exhausted by 2029. All members of the Advisory Panel agreed that some or all of Social Security's funds should be invested in the private sector. To keep the unchanged system actuarial sound, payroll taxes would have to be increased 50%, to 18% of payroll, or benefits would have to be slashed by 30%. <span style="background-color: transparent; color: #000000; font-family: Arial; font-size: 12pt; font-style: normal; text-decoration: none; vertical-align: baseline;">**1999** <span style="background-color: transparent; color: #000000; font-family: Arial; font-size: 12pt; font-style: normal; font-weight: normal; text-decoration: none; vertical-align: baseline;"> - The Social Security Trustees' Report stated the Social Security Retirement System's unfunded liability increased by $752 billion since the 1998 Trustee Report was published. This brings the total long-term unfunded liability to more than $19 trillion. <span style="background-color: transparent; color: #000099; font-family: Arial; font-size: 12pt; font-style: normal; font-weight: normal; vertical-align: baseline;">[|__http://www.socialsecurityreform.org/history/index.cfm__] <span style="background-color: transparent; color: #000099; font-family: Arial; font-size: 12pt; font-style: normal; font-weight: normal; vertical-align: baseline;">[|__http://www.ssa.gov/history/hfaq.html__]
 * **//Work credits—When you work, you earn credits toward Social Security benefits.//** You need a certain number of credits to be eligible for Social Security benefits. The number you need depends on your age and the type of benefit for which you are applying. You can earn a maximum of four credits each year. Most people need 40 credits to qualify for retirement benefits. ||
 * ||~ //2009// ||~ //2010// ||
 * || $1,090 earns one credit || $1,120 earns one credit ||