The end of Social Security (Not a flame thread)

by Preston 24 Replies latest social current

• 

  Preston

  Edited to add: also, on $1,000 of payroll, the SS allotted amount that the employee pays is $76.50. The employer then pays their portion : $76.50 also. The SS rate is .0765% with OASDI & FICA for each the employee and the employer

  Hence the (around) $150 figure I came up with Xena. For Roy, he would pay out his employee's and the company's social security ($76.50 + 76.50 = $153). So even though my calcs were rounded, they were correct.

  As for 1099-ing my employees, I know it means hiring them as contractors, and I would make a decent attempt to work around it in the spirit of our government's making it difficult for anyone to start their own business...
• 

  roybatty

  If I had my own company, I would just 1099 my staff and let them worry about their deductions....

  You can't just "do" that. That staff would have to be independent contractors and the IRS rules and the criterion for unemployment compensation (at least in our state) is very rigid about who can be considered as such.

  Exactly. I've tried the 1099 (independent contractor) route but it's difficult. My company engineers plastics products. We do everything from designing sippy cups for Gerder to medical products for differnt companies. We then build the "molds" that produce the plastics parts and we also produce the parts. I do the engineering, I have five "moldmakers" and two machine technicians. The two technicans cannot be contractors, it would be impossible. I could make some of my moldmakers "contract" workers but the problem I forsee is that they'd each have their own "job" and I'd loose control over the shop since a moldmaker wouldn't be interested in helping finish a job that he's not contracted to build. Then there's the whole issue of "how do they rent machine time" from me because I have automated machines that cost hundreds of thousands of dollars that they obviously need to use. Plus my accountant said that each contractors should really be set up as a small business. I don't think they'd want to do that. Too much of a hassle, plus having to get their own insurance. But the bottom line is I'd loose control over the jobs in my shop.
• 

  xenawarrior

  ((Preston)) I guess I got confused when you were talking about double taxation and said that your company was paying out the $150 on the employee when it's only half of that amount that the company actually pays and the other half is paid by the employee.

  As far as hiring people as independent contractors is concerned; there are only certain people who should be considered contractors vs. employees and really it's unfair to the person/employee to categorize them as anything but employees unless they really are. Most often it's an attempt by the company to get around paying the associated payroll costs of doing business. Employees have a right to be covered by workers compensation in the event they are injured on the job and unemployment compensation if they lose their job through no fault of their own. Only those people who are actively set up in business for themselves and offering their services to businesses should be considered independent contractors.

  And people who are independent contractors are paid at a higher rate for their work to cover the self employment tax. That total amount of SS is due whether the person is a contractor or an employee and if they are a contractor, what they are paid then goes up by at least 7.65% to cover it.
• 

  metatron

  Slightly off topic, this 'tax the rich' stuff bothers me.

  It looks like a sloganistic appeal to liberals who don't want to think.

  Are rich people generally stupid? If you tax them in one area, what prevents them from

  moving their income elsewhere? If they tax investment activities that might generate jobs,

  why not put your money in art or other unproductive areas? The goal of the tax system should

  be to maximize tax collections intelligently and shift investments away from yachts and into

  productive businesses.

  metatron
• 

  roybatty

  Slightly off topic, this 'tax the rich' stuff bothers me.

  It looks like a sloganistic appeal to liberals who don't want to think.

  Are rich people generally stupid? If you tax them in one area, what prevents them from

  moving their income elsewhere?

  My neighbor who recently lost his job is on the "tax the rich corporations and the rich in general" bandwagon. He doesn't realize that the small business owner is the one who's hurt the most. Like they say "be careful what you wish for."