PUP-3002 Lecture Notes - Lecture 13: Aarp, Earned Income Tax Credit, Federal Insurance Contributions Act Tax
Document Summary
Concepts: social security, payroll taxes, social security trust fund, cost of living adjustment (cola) Earned income tax credit is targeted for poor, working families. A tax reducion and wage supplement for low and moderate-income families. A tax credit like the credit for dependents. Reform tax law (expand earned income tax credit) Cash beneit ied to lifeime earnings: based on age, how long you worked, earnings, the poor get a greater return on investment. Started in new deal during great depression: reired workers (1935) Age is now 66, will rise to 67 (1983 law gradually raises age: survivor beneits (1939, disabled workers (1956) Redistribuion of funds across generaions (a redistribuive policy) Fica payroll tax on employer: employer pays the tax; tax burden is shared, tax is capped on income exceeding ,700 (2010) Regressive tax on the employed: 6. 2% of income for ss. 1983-2009, social security has more revenues than it paid out.
