In “The Taxing Part of the Summer Job.” The Wall Street JournalMay 14-15, 2022 Print edition, Laura Saunders tells young people what to expect from their first summer job.
Saunders made it clear that the bulk would be taken from Social Security (12.4%) and Medicare (2.9%), and half of it for employees was from employee checks. He writes:
Since the payroll tax is a flat tax, low-income earners often owe a lot more in salary tax than in income tax, says Mark Luscomb, chief tax analyst at Walters Clover Tax and Accounting.
He did not mention that the social security tax is listed as FICA and the Medicare tax is listed as HI. I hope he stays because a lot of young people will see that Social Security exclusion is not listed as Social Security and some version of it will say (I’m politely saying here), “What is FICA?” I don’t blame them. Social Security is a chain letter, as the Social Security Administration explains here.
Of course, SSA doesn’t use that term, but it does say:
The tax money you pay is not kept in your personal account for use when you receive benefits. Today’s staff helps pay for the benefits of current retirees and other beneficiaries. Any unused money goes to the Social Security Trust Fund to secure today and tomorrow for you and your family.