Are Taxes Being Increased?
09/18/2020
No matter your political affiliation, taxes impact all of us. These could be payroll taxes that reduce the amount of the check you deposit into your bank account or sales tax that increase the cost of an item you want to purchase or income tax.
Question for you – it has been said that payroll taxes (specifically the Federal Social Security Tax which is 6.2% tax for the employee) have not increased in quite some time.However, the wage base has continued to increase over time. If the percentage of the tax, 6.2%, has stayed the same, but the actual tax paid (due to the increase in the wage base) has increased, do you consider this an increase in taxes paid?
*
| Year | Wage Base | Increase | Maximum Social Security Employee Share |
| 2020 | $137,700 | 3.6% | $8,537.40 |
| 2019 | $132,900 | 3.5% | $8,239.80 |
| 2018 | $128,400 | 0.9% | $7,960.80 |
| 2017 | $127,200 | 7.3% | $7,886.40 |
| 2016 | $118,500 | 0.0% | $7,347.00 |
| 2015 | $118,500 | 1.3% | $7,347.00 |
| 2014 | $117,000 | 2.9% | $7,254.00 |
The answer to this question (which is the same answer I give to most accounting and tax questions) is it depends. If your wage base has been less than $100,000 since 2014, you will not notice any change in your employee portion of social security tax paid. However, if your wage base is closer to $150,000 for any given year, than it is possible you will notice an increase in social security taxes paid, even though the percentage of 6.2% has stayed the same.
The takeaway from this article, I recommend, is when the media indicates a federal tax decrease, a federal tax increase or no tax change, etc.it is important to get all the information to make your own informed decisions.
*Chart and historical data taken from https://en.wikipedia.org/wiki/Social_Security_Wage...