Social Security Taxation - Payroll taxes ???

[GailL1]

Should Employer Provided Health Benefits be taxed for Social Security as compensation (which they are)?

Of course, with the employer matched amount also.

This would given the employee a bigger benefit at retirement.

This is the biggest tax expenditure that we currently have in the country.

U.S. Dept of the Treasury - Tax Expenditures

from the link ~

Tax expenditures describe revenue losses attributable to provisions of Federal tax laws which allow a special exclusion, exemption, or deduction from gross income or which provide a special credit, a preferential rate of tax, or a deferral of tax liability. These exceptions are often viewed as alternatives to other policy instruments, such as spending or regulatory programs.

What are the largest tax expenditures? (Ten year, FY2021-2030 estimates)

• Exclusion of employer contributions for medical insurance premiums and medical care ($2,807,130 million)

[TheodoreK743813]

When the  "Government" decided to move SSI into a "give away"  government handout so that they could cover aid to immigrants, the change made us all look like we are taking government handouts. One senator spent 45 years trying to destroy OUR PAID FOR retirement income, and give it away to  the undeserving. See article at Kayted.com for researched history of SSI.

[john258]

Bad support article.

[ReTiReD51]

.

After adjusting for inflation, the average hourly wage in 2021 for U.S. American workers has about the same purchasing power it did in 1978. This 40+year war on the American workers wages which has led to the decrease in the Medicare and social Security reserves.

And now my friends on this thread want to see the average American worker lose a pretax healthcare benefit to only end up paying higher taxes consequently even lowering their purchasing power more. Do they realize they are making it more difficult for workers to earn a living wage?

It’s not enough that CEO pay has skyrocketed 1,322% since 1978, and CEOs are paid 351 times as much as an average American worker. They’re not going to be satisfied until grandma is finally pushed off the cliff.

[fffred]

@GailL1 

An interesting aspect to this is the preponderance of part-time work with little or no health care benefits. I have read anecdotally for years of how some companies specifically restrict work hours for some workers (mostly retail, fast food, etc) so that they don't have to provide health care. I wonder if an unintended side effect of these proposals, which are intended to strengthen Social Security, may not be to create an even deeper underclass of these part-time workers come retirement time?

It's always something.

[fffred]

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@GailL1 wrote:

Should Employer Provided Health Benefits be taxed for Social Security as compensation (which they are)?

Of course, with the employer matched amount also.

This would given the employee a bigger benefit at retirement.

This is the biggest tax expenditure that we currently have in the country.

U.S. Dept of the Treasury - Tax Expenditures

from the link ~

Tax expenditures describe revenue losses attributable to provisions of Federal tax laws which allow a special exclusion, exemption, or deduction from gross income or which provide a special credit, a preferential rate of tax, or a deferral of tax liability. These exceptions are often viewed as alternatives to other policy instruments, such as spending or regulatory programs.

What are the largest tax expenditures? (Ten year, FY2021-2030 estimates)

• Exclusion of employer contributions for medical insurance premiums and medical care ($2,807,130 million)

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Very interesting. Food for thought.

[GailL1]

MORE:  Policy Brief 2016

SSA:  Policy Brief 2016 - Distributional Effects of Applying Social Security Taxes to Employer-Spons...

I will just throw this out since I doubt many here are interested - I haven't completely digest how they came to their findings ( 2016).  BTW, thanks for your interest.

Major Findings

• Counting employer-sponsored health insurance premiums as wages for Social Security purposes would increase Social Security taxes for most individuals. The tax increases would generally be proportionately smallest for high earners, and largest for low and middle earners.
• Social Security benefits would gradually increase for most new beneficiaries. Benefit increases would generally be larger for low and middle earners than for high earners, and larger for later cohorts than for earlier cohorts.
• On the balance, beneficiaries' lifetime Social Security taxes would increase more than their lifetime Social Security benefits at all earning levels.
• The poverty rate among Social Security beneficiaries aged 60 or older would decrease faster than the poverty rate under current law.

[fffred]

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@GailL1 

• Counting employer-sponsored health insurance premiums as wages for Social Security purposes would increase Social Security taxes for most individuals. The tax increases would generally be proportionately smallest for high earners, and largest for low and middle earners.
• Social Security benefits would gradually increase for most new beneficiaries. Benefit increases would generally be larger for low and middle earners than for high earners, and larger for later cohorts than for earlier cohorts.
• On the balance, beneficiaries' lifetime Social Security taxes would increase more than their lifetime Social Security benefits at all earning levels.
• The poverty rate among Social Security beneficiaries aged 60 or older would decrease faster than the poverty rate under current law.

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Bullet point # 4:   To me, that is encouraging (my values)

Bullet point # 3:   Not great news but on reflection probably how it needs to be; picking up some of the slack from prior years

Bullet point # 2:   Interesting points. I wonder why they are increasing the target wage replacement? did they forget about the other two legs of the stool? And again it sounds like a progressive system...as it is now...where the lower wage earners get a higher return (this is not something I disagree with in principle. or practice). 

Bullet point # 1:   It seems strange at first to consider taxing benefits such as employer health care. But it is all remuneration for the worker, regardless of the type of benefit it is:  vacations, sick days, child care leaves, insurance(s), and many other types of benefits. To create a "flatter" range of taxable wages (a philosophical point that some might debate either way) it's going to be expected to tax the various forms of "pay". Now in my own case, my company provided some benefits that were already taxable under current law, including gym memberships and some similar benefits. But the owner of the small company must have valued the people because they inflated the benefit in order to account for the additional tax due!