Question

Explain the procedures to be followed when computing the social security tax on an employee earnings. Do you think that there should be a limitation on the amount of earnings that are subjected to the OASDI portion of the SSN? Should we place a limit on the Hl portion? See the below article on Warren Buffet and briefly explain what Mr. Buffet perspective is on the limitation of the OASDI taxes. What is your perspective when it comes to raising the OASDI tax cap or not to raise the OASDI tax cap?

it is about Social Security Old-Age, Survivors and Disability (OASDI) and Hopstal Insurance(HI).

Answer 1

- In US , Social Security is financed basically through finance charges called Federal Insurance Contributions Act charge (FICA) or Self Employed Contributions Act Tax (SECA).

- Taxes are gathered by the IRS and are officially endowed to the Federal OASDI and the Federal Disability Insurance Trust Fund, the two Social Security Trust Funds.

- These two trust supports buy government protections, the intrigue salary from which is utilized by and by to subsidize the month to month assignments to qualifying residents. With a couple of exemptions, all salaried salary, up to a sum explicitly dictated by law is dependent upon the Social Security finance charge.

- There are limits on the Social security deductions. All salary over said sum isn't burdened. In 2020, the most extreme measure of available profit is $137,700.

- According to Buffet, there are two fundamental ways that we could fix Social Security's anticipated monetary shortage - cut advantages or raise charges.

- Buffett has supported evacuating - or possibly expanding - the Social Security greatest available profit. For 2018, the most extreme measure of pay subject to Social Security finance charge is $128,400. This leaves billions of potential Social Security charge from high workers on the table.

- And keeping in mind that Buffett hasn't legitimately referenced raising the Social Security finance charge rate - as of now 6.2% on the two businesses and representatives - he has supported the U.S. paying a more noteworthy level of GDP toward Social Security.

- Buffett's friend Charlie Munger also said that If the nation will develop at 2%-3% per annum for a considerable length of time ahead, it's a drop in the bucket to take a little bigger portion of the pie and redirect it to the individuals who are more seasoned. Social Security has a low overhead and does a ton of good.

- We believe, it's essential to call attention to that not the entirety of Buffett's thoughts regarding Social Security have to do with raising assessments.

- Buffett additionally brought up that it might be important to raise the full retirement age, also. Maybe the possibility that 65 isn't the correct age for retirement any longer is right and more change is required.