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Entry: Greenspan's Gambits Link: http://www.takimag.com/site/article/greenspans_gambits#5454 Post contents: As noted, half of the payroll tax is paid by the employee, half by the employer. Joe arrives at his 15.3% figure by combining the employer's half with the employee's. Legally and from an accounting standpoint, this is incorrect. Furthermore, it is questionable economic theory to assume that the entire burden of the payroll tax is borne by the wage-earner. The only people who pay the entire burden of their OASDI and Medicare taxes from their own income are the self-employed. We further note that Federal and state unemployment taxes are entirely borne by the employer, and are in addition to the Social Security payroll tax. "Taxable income" is income after deductions and exemptions, i.e., that income subject to the tax algorithms given in the referenced schedule. Joe, I hope you have someone competent prepare your tax returns, since you don't seem to understand taxation very well. We'd hate to see you pay more than you need to, or get in trouble for failing to calculate a sufficient payment. Sent at: 2008 11 22