The SS tax rate is scheduled for a statutory increase effective July 1, 2000 from 5% to 6%. Why is the 1% increase necessary?
The statutory SS tax rate increase would increase the employee’s share of contributions from 5% to 6% of taxable wages and would also increase the employer’s matching contribution by the same rate, for a total of 2% increase in the combined SS tax rate (12%). This increase is actuarially determined as necessary to support payments to current benefit recipients as well as to projected beneficiaries over the next years after 2000, including the cost of administration.
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