What is FICA, and is George Bush planning to cut this tax?
FICA is an acronym for the Federal Insurance Contributions Act, which is the name of the legislation that requires employers to withhold taxes from your paycheck to cover certain government programs. The FICA withholdings are known as “payroll” taxes, and don’t expect to see the amount diminish if George Bush’s tax cut proposal passes. His plan is about federal income taxes, not payroll taxes. What comes under FICA are the federal taxes on Social Security, disability, and Medicare. Unlike federal income taxes, which vary depending on how much money you make and how many tax credits or deductions you can claim, the FICA taxes are set at a fixed rate for every employee. For the 2000 tax year, the amount of money an employee paid for Social Security was 6.2 percent of wages up to $76,200 of income. That is, any money you make above the $76,200 ceiling is not subject to further Social Security tax. This Social Security component (also known as OASDI, an acronym for Old-Age, Survivors, and
