Question

Lawmakers designed the burden of the FICA payroll tax to be split evenly between workers and firms. Labor economists believe that a. lawmakers may have actually achieved their goal because statistics show that the tax burden is currently equally divided. b. the tax raises too little revenue for the government, so it should be eliminated. c. firms bear most of the burden of the tax. d. workers bear most of the burden of the tax.

Answer 1

Answer:

The correct answer is d. workers bear most of the burden of the tax.

Explanation:

FICA taxes are the amount of money that is deducted from an employee's salary along with the employer's contribution. This money goes to pay for Social Security and Medicare programs.

Both the employer and the employee make contributions to FICA. Most of the money goes to the Old Age and Survivors Trust Fund and the Disability Insurance Trust Fund. These funds are administered by the United States Department of Treasury and are collectively known as OASDI.

The Medicare program is also funded in part with FICA taxes. The amount paid by employers is used to pay hospital bills and health care costs for people covered by Medicare.