|Tax Rates (percent)|
|Social Security (Old-Age, Survivors, and Disability Insurance)|
|Employees a,b (through February 29, 2012)||4.20|
|(beginning March 1, 2012)||6.20|
The employee share of payroll taxes to fund social security is to rise from 4.2 (cents in the dollar) to 6.2 in March next year. Apparently the lower employee rate was a temporary measure which cannot be sustained. From Forbes earlier this year:
Meanwhile, if you’re a worker, start tightening your belt: The Social Security taxes taken out of your paycheck could rise to $6,826.82 next year, from $4485.60 this year—a significant $2341.22 hike. The increase is due to two factors. First, as the SSA announced today, the maximum salary subject to Social Security tax is rising from $106,800 in 2011 to $110,100 in 2012 as part of the just announced inflation adjustments. That increase affects about 10 million wage earners. Second, a temporary 2011 rate cut in the employee’s part of the Social Security tax—from 6.2% to 4.2% of pay–is scheduled to expire. As part of his proposed jobs package, President Barack Obama wants to cut the employees’ Social Security tax to just 3.1% for 2012. But Republicans have so far shown no inclination to pass the provision, which would cost $175 billion and seem ready to let the 2011 rate cut lapse, leading to a tax hike on all workers.
(Unemployment insurance is additional to these rates.)