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Payroll Taxes
About This Indicator
What Are Payroll Taxes?
Mostly wage taxes, paid by workers and employers for Social Security, Medicare, and unemployment insurance, in billions of dollars at an annual rate, from the Bureau of Economic Analysis. Quarterly since 1947, estimated back to 1929.
Why Does It Matter?
It starts with the first dollar of wages, with no deductions or credits, so a worker who owes no income tax still pays it. Employers match what workers pay for Social Security and Medicare. The Social Security part is capped, so top earners pay a smaller share of income than the middle.
Can Politics Influence Them?
Congress sets the rates, raised often since 1937 and cut in 2011 and 2012; the wage cap tracks average wages on its own.
Key Idea
No account holds a worker's payroll taxes: each year's mostly pay that year's Social Security and Medicare hospital benefits. So a generation's birth rate shapes, decades later, how many retirees each worker supports.
Not Scored
Source: BEA. NIPA Table 3.2 (W780RC).
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