What do you do when a really smart, really good blogger gets it wrong? Well you call them on it. That's how the system works. A lowly little 90 hits a day blog like this can take on a 1,700 hit blogging legend like Rachel Lucas.

Rachel has a brief post noting how the burden of doing her taxes is impacting her blog. One of her problems is of course the payroll tax for Social Security and its burden on the self employed. I agree fully with this part

I'm 32! I'm screwed! The baby boomers will suck every last dollar out of the entire system and leave the next generation JACK. Thanks, boomers! Fucking it up for everybody since the 1950s! Love ya!!

But there is part of the picture that Rachel gets wrong. And wrong in a way that is part of the reason that the system exists as it does.

Doing extra work because taxes are due in two months and I'm self-employed and you know what that means. Punishment for the folks who don't work for someone else, that's right, the delightful and stunningly enlightened “self-employment tax”, which, for those of you who don't know, means I pay the full 15.3% of social security and Medicare taxes, whereas if you work for someone else like a good, obedient American, you only have to pay half of that and your employer pays the rest. How nice for you, yes? Suck it.

To put it simply, you are both the employer and the employee. Both halves of the payroll tax reduce the dollars in your pocket. It's no different if you're working for someone else. Both halves of the payroll tax reduce the dollars in your pocket. It's just that half of it is taken before it ever gets there. Where do you suppose the employer gets the half of the tax they pay? They just pay you less and send the difference to FICA.

And yeah, it sucks.

Posted by: Stephen Macklin at 08:24 AM | Comments (5) | Add Comment

1 Yep. If my employer is paying me $14 an hour, about $1 of that will taken for Social Security, and my employer adds another $1 to bring it up to $2. My employer knows that, of course. So, if suddenly the entire amount were to be taken from my gross pay (and my pay is pretty gross lemme tell ya...) then I'd expect my employer to start paying me $15 an hour.

Of course, in the end, what my employer pays is added onto my total and what I have offficially "contributed" is twice what my own paystubs would imply that I "contributed".

Smoke and mirrors. Just to let us think that our burden isn't really so bad. Heck, it's only 7.65%... at least we're not paying 15.3%!

Posted by: Tuning Spork at February 17, 2005 11:45 AM (MB5kA)

2 You got it right, smoke and mirrors indeed. That whole "cost of doing business" thing, i.e. the employer portion of many taxes, is hidden from most Americans so that they never fully realize just how much Uncle Sam reaches out and takes.

Posted by: El Cid at February 17, 2005 06:36 PM (t5xXq)

3 One of the funniest things ever said on the tv show Friends was said by Rachel after she got her first pay check (I think I'm quoting accurately): "Who is FICA and why is he taking all my money?!?"

Posted by: RP at February 18, 2005 06:04 AM (LlPKh)

4 And she didn't know the half of it!!

Posted by: Stephen Macklin at February 18, 2005 07:02 AM (UquFN)

5 Suck it does yes.

FDR is to blame, pass it down.

Posted by: Paladin at February 18, 2005 08:41 AM (Rfqkp)

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