Regardless, people who make over $250k ALREADY pay way too much tax IMO as it is, and they shouldn’t have to pay more. They already pay WAY more then their share. The Fed and State Governments shouldn’t heap all the burden of our current debt & entitlement woes on this small group of financially successful people. If Obama raises the top bracket to 40% federal & you combine fed + state income taxes post prop 30, CA high income earners are going to be paying taxes close to European countries. And for all that tax we don’t get sh*t for services in the U.S. or Ghettofornia. At least in Europe you get something for being skinned alive by the Government.
Chuck Schumer one of the moderate democrats (and often voices of reason) in congress even said Obama should not consider $250k rich, he said it should be $1 millon+. Wow, someone with some common sense in congress![/quote]
That site is accurate (from what I can tell) on a per-paycheck basis – not on an annual basis, for SS. Once you hit the 106,800 annual income, they stop withholding.
It’s kind of like if you have large 401k percentages early in the year – then when you hit the cap you get bigger net paychecks. Same happens with SS taxes… once you hit the cap – they stop withholding and you get a bigger net paycheck.
It gets messier if you change employers – your new employer continues to withhold based on your earnings with them. So the income you earned earlier in the year, under a different employer doesn’t trigger a cap when you hit YOUR cap YTD… because the new employer doesn’t have your income info from the previous employer.
(this happened to me many years ago. – a much unexpected LARGE refund.)
As far as your link. I understand how you got your info… but I’ll trust the actual Social Security website over an online paycheck withholding calculator for what the rules are. And the rules are that the cap is for income up to $106,800 for 2012.
