You'll Probably Pay This Tax All Year -- but the Rich Won't
Paying taxes is never fun, but one thing that makes many taxpayers more comfortable is the idea that the more money you make, the more in taxes you'll pay. The U.S. has a relatively progressive income tax system, with multiple tax brackets that go up as your income rises.
However, when it comes to Social Security payroll taxes, the situation is much different. The federal government takes money out of every employee's paycheck at the same flat percentage rate of 6.2% for Social Security. Moreover, there's a maximum amount above which no additional tax gets charged -- essentially meaning that the rich get to stop paying this tax at some point during the year even as those of more modest means end up paying it all year long. Below, we'll look at how this tax works and why many think it unfairly favors the wealthy.
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Source Fool.com
