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35-602: In 2020, the Social Security Wage Base was $ 137,700 and in 2021 was $ 142,800; the Social Security tax rate was 6.20% paid by the employee and 6.20% paid by the employer. A person with $ 10,000 of gross income had $ 620.00 withheld as Social Security tax from his check and the employer sent an additional $ 620.00. A person with $ 130,000 of gross income in 2017 incurred Social Security tax of $ 7,886.40 (resulting in an effective rate of approximately 6.07% –

70-529: A consensus behind the notion that "adjusting for legal restrictions on what the CBO can assume about future legislation and events, the CBO has historically issued credible forecasts of the effects of both Democratic and Republican legislative proposals." According to MIT economist David Autor , the "CBO has a good track record with a very difficult assignment. It errs, but not systematically or with partisan intent." According to Yale economist Christopher Udry , "There

105-408: A fight between President Richard Nixon and a Democratic -controlled Congress . Congress wanted to protect its power of the purse from the executive. The CBO was created "within the legislative branch to bolster Congress's budgetary understanding and ability to act. Lawmakers' aim was both technical and political: Generate a source of budgetary expertise to aid in writing annual budgets and lessen

140-774: A mid-year update. The agency also each year issues An Analysis of the President's Budgetary Proposals for the upcoming fiscal year per a standing request of the Senate Committee on Appropriations . These three series are designated essential titles distributed to Federal Depository Libraries and are available for purchase from the Government Publishing Office . The CBO often provides testimony in response to requests from various Congressional committees and issues letters responding to queries made by members of Congress. The Congressional Budget Office

175-718: A small number of independent agencies that are not considered part of the executive branch, such as the Congressional Research Service and the United States Sentencing Commission , which are legislative and judicial agencies, respectively. The U.S. Congress is the bicameral legislature of the United States government, and is made up of two chambers: the United States Senate (the upper chamber) and

210-437: A spike, when in fact it is a return to the levels imposed in the years 1990 through 2010. Note that although self-employed individuals pay 12.4%, this is mitigated two ways. First, half of the amount of the tax is reduced from salary before figuring the tax (you don't pay Social Security tax on the tax your employer pays for you.) Second, the "employer" half is an adjustment to income on the front page of Form 1040. As part of

245-463: A term of office, the person serving as Director may continue in the position until his or her successor is appointed. The list of directors of the CBO are: Whereas politicians on both sides of the aisle have criticized the CBO when its estimates have been politically inconvenient, economists and other academics overwhelmingly reject that the CBO is partisan or that it fails to produce credible forecasts. A March 2017 survey of leading economists shows

280-552: Is a federal agency within the legislative branch of the United States government that provides budget and economic information to Congress. Inspired by California's Legislative Analyst's Office that manages the state budget in a strictly nonpartisan fashion, the CBO was created as a nonpartisan agency by the Congressional Budget and Impoundment Control Act of 1974 . Whereas politicians on both sides of

315-635: Is divided into nine divisions. The Speaker of the House of Representatives and the President pro tempore of the Senate jointly appoint the CBO Director after considering recommendations from the two budget committees. The term of office is four years, with no limit on the number of terms a director may serve. Either house of Congress, however, may remove the director by resolution. At the expiration of

350-481: Is identical to the SSWB the contributions may be double above the base not to exceed 5.7% for excess plans. For offset plans the defined-contribution plan may base contributions on total base salary and then reduce or "offset" the contribution rate for salary below the integration base. If the integration base for such offset plans is identical to the SSWB, then the reduction could be up to 5.7%. For defined benefit plans

385-652: Is no credible evidence of partisan bias." Economist Walter E. Williams , a classical liberal , wrote in 1998 that the CBO was well-regarded for its "honest numbers" on fiscal and economic matters. According to the Los Angeles Times , "the CBO's analyses and forecasting are regarded as good or better than others doing similar work... economists say that the CBO's economic projections generally compare favorably against other outfits, and its long-term budget estimates have been fairly accurate." According to George Washington University political scientist Sarah Binder,

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420-544: Is not in their interest. A weak CBO weakens the Budget Committees, and indeed weakens Congress as a whole in its inevitable battles with the executive over budget and economic policy. List of United States federal agencies [REDACTED] [REDACTED] Legislative definitions of an agency of the federal government of the United States are varied, and even contradictory. The official United States Government Manual offers no definition. While

455-455: Is quite surprising, in a sense, given the partisan nature of the Congress. It is not necessarily that these partisans have embraced nonpartisanship as a positive end in itself, however. Rather, the Budget Committees (and especially their leadership and staff) have recognized that a weak CBO (one that does not have a reputation for objective analysis, and whose conclusions are viewed as partisan)

490-409: Is reduced to $ 4,485.60, but the maximum employer share remains at $ 6,621.60. The maximum employee share in 2012 is reduced to $ 4,624.20, but the maximum employer share remains at $ 6,826.20. Effectively, this was a 4.2% rate charged to the employee, and 6.2% rate to the employer. This resulted in an approximately 40/60 split but reduced the total contribution. See here for a complete historical list of

525-567: Is reflected in the above table, showing the reduction from $ 6,621.60 to $ 4,485.60. Because taxes and benefits are based only on earnings up to the SSWB, pension plans can base contributions and or benefits in greater degree on earnings above the SSWB (excess plans) or reduce benefits or contributions below the SSWB (offset plans). The pension compensation nondiscrimination laws (Internal Revenue Code Section 401(a)(4)) require that qualified pension plans not discriminate in benefits, rights and features in favor of highly compensated employees (in 2007,

560-680: The Administrative Procedure Act definition of "agency" applies to most executive branch agencies, Congress may define an agency however it chooses in enabling legislation, and through subsequent litigation often involving the Freedom of Information Act and the Government in the Sunshine Act . These further cloud attempts to enumerate a list of agencies. The executive branch of the federal government includes

595-547: The Executive Office of the President and the United States federal executive departments (whose secretaries belong to the Cabinet ). Employees of the majority of these agencies are considered civil servants . The majority of the independent agencies of the United States government are also classified as executive agencies (they are independent in that they are not subordinated under a Cabinet position). There are

630-571: The Executive branch . This includes projections on the effect on national debt and cost estimates for legislation. Section 202(e) of the Budget Act requires the CBO to submit periodic reports about fiscal policy to the House and Senate budget committees to provide baseline projections of the federal budget. This is currently done by preparation of an annual Economic and Budget Outlook plus

665-468: The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 enacted on December 17, 2010, the employee Social Security tax rate is reduced from 6.2% to 4.2% for wages paid during the year 2011 and 2012. The employer Social Security tax rate and the Social Security Wage Base were not directly impacted by this act, though they did change; only the employee's tax rate changes. This

700-540: The United States House of Representatives (the lower chamber). Together, the two chambers exercise authority over the following legislative agencies: The legislature also oversees the Library of Congress (LOC), a national library dedicated to national records, which administers various programs, agencies, and services including: The federal judiciary consists of courts established under Article Three of

735-415: The $ 70,000 employee’s salary, or $ 4,340, for a grand total of $ 8,680 -- which exceeds the cap of $ 7,886.40 by $ 739.60. The over-payment would be entered on the applicable line of Form 1040 and, assuming the employee did not owe any other Federal taxes, would be refunded to the employee. The employers who each paid $ 4,340 will not get a refund, since they are not aware that the employee overpaid in aggregate for

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770-416: The 2013 guidance from SSA indicates the full rate OASDI is 12.4% for 2013. See footnote a. at 2013 SSA.gov link . Returning to the traditional 6.2% OASDI employee share for 2013 effectively reduces take home pay by 2% and increases the maximum OASDI contribution by the same amount, returning it to traditional levels. The dip in the maximum OASDI contributions for 2011 and 2012 causes the 2013 rate to appear as

805-575: The CBO "has emerged over its history as a neutral analyst of congressional budgets and cost estimates for proposed legislation." The agency has "a nonpartisan staff culture". Historically, the House Budget Committee and Senate Budget Committee have insulated the CBO from external pressures and attempts to politicize or weaken the office. Professor Philip Joyce of the University of Maryland School of Public Policy writes: This

840-738: The Congressional budget process." Each year, the agency releases reports and cost estimates for proposed legislation, without issuing any policy recommendations. With respect to estimating spending for Congress, the Congressional Budget Office serves a purpose parallel to that of the Joint Committee on Taxation for estimating revenue for Congress, the Department of the Treasury for estimating revenues for

875-452: The Social Security Wage Base. (**) Since 1990, the employer & employee share has usually been 6.2% each for a 50/50 split of the 12.4% combined total. The changes shown below applied In 2011 and 2012 when the rates were temporarily lowered to 4.2% for the employee (but remained at 6.2% for the employer). In 2013, the employee rate returns to 6.2% for a 50/50 split with the employer and a higher Maximum Contribution. For self-employed people,

910-611: The United States Constitution . These are the The United States bankruptcy courts , while not established as Article III courts, are legally designated as "units of the district courts." The judicial branch includes the following agencies: The President of the United States is the chief executive of the federal government. He is in charge of executing federal laws and approving, or vetoing, new legislation passed by Congress. The President resides in

945-413: The aisle have criticized the CBO when its estimates have been politically inconvenient, economists and other academics overwhelmingly reject that the CBO is partisan or that it fails to produce credible forecasts. There is a consensus among economists that "adjusting for legal restrictions on what the CBO can assume about future legislation and events, the CBO has historically issued credible forecasts of

980-469: The cap, because each employer may not know how much the employee has already paid in Social Security tax in other jobs. The Social Security tax coverage will be calculated on their personal return, and any excess is applied towards their Federal taxes. For example, in 2017 an employee works two jobs (either concurrently or consecutively) paying $ 70,000 each. Since each employer calculates the social security taxes independently, each employer will withhold 6.2% of

1015-400: The effects of both Democratic and Republican legislative proposals." The Congressional Budget Office was created by Title II of the Congressional Budget and Impoundment Control Act of 1974 (Pub. L. 93-344), which was signed into law by President Richard Nixon on July 12, 1974. Official operations began on February 24, 1975, with Alice Rivlin as director. The CBO's creation stems from

1050-475: The integration base is a career average of the SSWB for each year of the worker's career, which in pension law is called "covered compensation" base. Under pension law, the SSWB may not be projected to increase in the future so a new hire's covered compensation base would contain all future years at the current year's SSWB. Excess and offset plans also exist for defined-benefit plans. Congressional Budget Office The Congressional Budget Office ( CBO )

1085-569: The legislature's reliance on the president's Office of Management and Budget ." In 2015, the Brookings Institution reported that since its creation, the CBO has since supplanted the OMB "as the authoritative source of information on the economy and the budget in the eyes of Congress, the press, and the public." The Congressional Budget Office is nonpartisan , and produces "independent analyses of budgetary and economic issues to support

Social Security Wage Base - Misplaced Pages Continue

1120-429: The rate was lower because the income was more than the 2017 "wage base", see below), with $ 7,886.40 paid by the employer. A person who earned a million dollars in wages paid the same $ 7,886.40 in Social Security tax (resulting in an effective rate of approximately 0.79%), with equivalent employer matching. In the cases of the $ 130k and $ 1m earners, each paid the same amount into the social security system, and both will take

1155-447: The same out of the social security system. The Congressional Budget Office considers the employer share of taxes to be passed on to employees in the form of lower wages than would otherwise be paid, and counts them as part of the employees’ tax burden. Self-employed individuals pay the entire amount of applicable tax. When an employee works for several different companies during a tax year, their Social Security deductions could exceed

1190-412: The threshold is $ 100K of 2006 gross pay including bonuses and overtime). Because Social Security provides a progressive benefit formula and stops taxation at the SSWB, pension plans may integrate benefits or contributions according to a wage base, frequently at a fraction (e.g. 50%) of the SSWB. Plans can contribute a higher percentage to base salaries above an integration base. If that integration base

1225-411: The year. The government keeps the $ 818.40 overage. Even if the employers become aware of the overpayment, there is no method to claim the overpayment. Several occupations are exempted from the current cap with a far lower cap, such as food service employees and domestic help employees. For the year 2014, the cap was $ 6,500 in wages. Since 1998, the SSWB has been: (*) The maximum employee share in 2011

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