Part A:
Because, there is a ceiling on the amount of earnings that is taxable. Any earning below the ceiling will be taxed at 7.65% of the earning while any earning above the eiling will be taxed at 7.65% of the ceiling.
Given that the ceiling on the amount that is taxable is $117,000. If a worker earns $40,000, then the worker's FICA tax will be 7.65% of $40,000 = 0.0765 x $40,000 =
$3,060Therefore, the percentage of income that is paid in social security taxes by a worker in 2014 earning $40,000 is 7.65%
Part B:
Because, there is a ceiling on the amount of earnings that is taxable.
Any earning below the ceiling will be taxed at 7.65% of the earning
while any earning above the eiling will be taxed at 7.65% of the
ceiling.
Given that the ceiling on the amount that is taxable is
$117,000. If a worker earns $80,000, then the worker's FICA tax will be
7.65% of $80,000 = 0.0765 x $80,000 =
$6,120
Therefore, the <span>percentage of income that is paid in social security taxes by a worker in 2014 earning</span> $80,000 is 7.65%
Part C:
Because, there is a ceiling on the amount of earnings that is taxable.
Any earning below the ceiling will be taxed at 7.65% of the earning
while any earning above the eiling will be taxed at 7.65% of the
ceiling.
Given that the ceiling on the amount that is taxable is
$117,000. If a worker earns $200,000, then the worker's FICA tax will be
7.65% of $117,000 = 0.0765 x $117,000 =
$8,950.50Therefore, the percentage of income that is paid in social security taxes by a worker in 2014 earning $200,000 is given by