[lbo-talk] question about national sales tax

[Alan Jacobson]

Social security and Medicare taxes have different
rates and only the social security tax has a wage base
limit. The wage base limit is the maximum wage that is
subject to the tax for the year. Determine the amount
of withholding for social security and Medicare taxes
by multiplying each payment by the employee tax rate.
There are no withholding allowances for social
security and Medicare taxes. 

The employee tax rate for social security is 6.2%
(amount withheld). The employer tax rate for social
security is also 6.2% (12.4% total). The 2003 wage
base limit was $87,000. For 2004, the wage base limit
is $87,900. 

  The employee tax rate for Medicare is 1.45% (amount
withheld). The employer tax rate for Medicare tax is
also 1.45% (2.9% total). There is no wage base limit
for Medicare tax; all covered wages are subject to
Medicare tax. 
*********
Not my prose, it's from IRS Publication 15. It is a
straight calculation, if the amount taken out is
different from 6.2% for FICA (up to the cap) + 1.45%
for Medicare (no cap), there is an error.