The tax rate may increase annually in order to effectively fund OASDI programs.
According to FICAS, both employers and employees must contribute 7.65%. A tax is a mandatory fee or financial charge that the government imposes on an individual or an organization in order to raise funds for public works initiatives that provide the best infrastructure and facilities. Following then, various public spending projects are funded using the collected monies. The IRS determines tax rates based on income. As your income increases, so does your tax bracket and the portion of your income that is subject to tax. Federal income taxes are not paid by those who make extremely low wages or have no income at all. However, you do not take your tax bracket and divide it by your total income.
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