General Discussion
In reply to the discussion: Hmmmm.... Mar 1, 2013 CBO Report on Chained CPI [View all]DallasNE
(7,402 posts)A lot of small companies avoid payroll taxes by only "paying" a nominal salary to the business owner(s). If they were forced to pay a normal salary that would raise a ton of payroll taxes. Indeed, many would be paying at the SS cap or higher. I'm not sure why the IRS doesn't crack down on this. Also, why not raise the SS cap to $400,000/$450,000. Stock options are really a form of salary and they should be subject to payroll taxes as well. The Medicare Tax rate is currently 1.45% so increasing that to 1.75% would go a long way, along with cost control measures, to shoring up Medicare (that would be $150 a year for someone making $50,000). These are modest measures that would most likely be all of the fix that would be necessary yet I haven't heard much beyond the SS cap that would be simple yet effective like these measures would be.