Healthcare and Income Tax System

There are certain taxes on income that everyone has to pay, and FICA taxes are at the top of the list. And employers must withhold these taxes from employee paychecks and pay them to the Internal Revenue Service (IRS).

FICA taxes are the Social Security and Medicare taxes paid by individuals and employers. FICA taxes are called payroll taxes because they are based on the amounts paid to employees.

FICA taxes have two elements. Withheld from employee paychecks and paid by employees and employers for (1) Social Security (OASDI) and (2) Medicare.  This article gives you information about how to calculate FICA taxes, how to report and pay these taxes, what earnings are not part of FICA taxes, and more.

The term "FICA" is short for the Federal Insurance Contributions Act. The Act was introduced in the 1930s to pay for Social Security.

Lowering corporate taxes is a benefit to existing businesses, giving them a short-term profit. But, lowering taxes does not lower the cost of manufacturing because it only affects the revenues above the cost break even line. The Congressional Budget Office has just revised the forecast downward for the creation of new jobs because of the latest tax refund legislation and increased the increase to the national debt from $11.5 billion to $13.5 billion for the next ten years.

When these recommendations for a single payer system and revised tax system are implemented there will be many changes taking place, some good and some bad. On the good side, everyone will be covered for health care, people with pre-existing conditions will be covered and people will have their choice of healthcare provider. Employees with existing illnesses or disabling skills will be able to get jobs and hold on to them with their skills to produce. The money allocated to the employees for health care will be paid to them in the form of higher wages, about $10 thousand per employee, plus FICA taxes. The salary increase will be the biggest recorded in our nation’s history while creating a huge consumer group flush with money. The 1.7 million bankruptcies personal bankruptcies due to health care costs will be eliminated. The 25 percent of administrative health care expenditures for billing and collecting will be eliminated. The national health care expenditure will be cut in half or lower. The trade deficit will be eliminated. The National Debt will be lowered. With universal healthcare all employees will have a greater freedom of choice of where they work and not have to worry about changing jobs with a loss of medical coverage. The state’s Medicaid expenditures will be eliminated and should immediately be moved to offset the cost of free higher education, like every other industrial country. 

On the downside the bad news is: based on a comparison with the insurance companies’ employees per capita of Canada 250,000 sales jobs will be lost, there is no need for sales people; these sales jobs should easily be moved to the manufacturing industry. Taxes paid for The Federal Insurance Contributions Act (FICA) will be increased and a flat tax added to the corporate and personal income rates. The total FICA tax is 15.3%. That percentage is applied to the employee's gross pay. The employer and employee each pay 7.65%. Here is the breakdown of these taxes:

• Within that 7.65%, the OASDI (Old Age, Survivors, and Disability program, AKA, Social Security) portion is 6.2%, up to the annual maximum wages subject to Social Security.
• The Medicare portion is 1.45% for each employee, on all employee earnings.

The new amount of the flat tax will have to be determined by the General Accounting Office and should be added on all earned income tax levels, which will insure all people pay their fair amount of taxes. The medical portion should only rise 3% to 4% raising each contribution to 10.65% to 11.65%. Included will be the government’s obligation to our military veterans. The rise in the amount collected for the new taxes will be far lower than each person’s increase of income.

Our progressive personal income tax system is fair. We realize certain individuals will always make more than others, allowed to keep most of it which is a strong motivator for success. We also realize that when more is given to an individual under our capitalistic system, a strong financial system is required for maintaining our freedom, therefore in the short run more has to be given to the government for the maintenance of the country, maintenance of our capitalistic system and the benefit of its citizens who make it possible. In the future we will pass legislation for the maintenance of a balanced budget.  When the transition is finished, we must allow market forces to stabilize all industries and keep government interference to a minimum.

The country must make the changes advocated or we will be facing financial ruin. Manufacturing creates wealth. Without a strong manufacturing industry, we will become a third world country, with our main industry becoming agriculture. The cost of our produce will keep rising because other rich nations will be buying our produce and will inflate our costs.

A massive stimulus program will take place to give more money to employees directly and the first steps to rebuild the United States manufacturing industry. On August 14th, 2020 the employers are to cancel all health insurance contracts for employees; the employers are to pay each employee the amount allotted for health care benefits, which is to be included in employee’s salaries. Medicare is going to cover all medical expenses, at the rates already determined. Every patient will give the health care provider their Social Security Number or their guardians SS #. All assets of health insurance companies will be frozen by Internal Revenue Service while audits are in process.