2. How much money is deducted from your
paycheck for Social Security & Medicare tax?
7.45%
How much is deducted from someone who
makes $80,000?
7.45%
This is PROPORTIONAL.
Is it fair?
3. How much money is deducted from someone
who makes $200,000 for Social Security &
Medicare tax?
7.45% of the first $90,000, 0% after that
Is it fair?
One argument is yes, because social security
benefits don’t go up for that person, so why
should they pay more.
Do you think this argument is from the
Republicans or Democrats?
4. Social Security over $90,000 is a REGRESSIVE
tax, because the poor pay at a higher
percentage than the wealthy.
Gasoline tax is another example:
◦ One person earns $5,000 a year and buys $50 gas
per week
◦ Another person earns $50,000 a year and buys $50
of gas per week
They pay the same AMOUNT of tax, but the
person who earns $5,000 pays a higher rate.
6. How much income tax does someone who earns
$5,000 pay?
$0
$10,000?
About $500
$25,000?
About $2800
$200,000?
About $75,000
This is called PROGRESSIVE – higher incomes pay
higher rates.
Is this fair?