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View Diary: A Tale of Two Americas (259 comments)

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  •  Then day-trader income should pay social security (0+ / 0-)

    tax.  Currently, even APART from the super-regressive Bush tax cuts, the day trader doesn't pay SS tax and the security guard does.

    -5.63, -8.10. Learn about Duverger's Law.

    by neroden on Tue Nov 09, 2010 at 04:10:48 PM PST

    [ Parent ]

    •  If that daytrader is self-employed, he/she (0+ / 0-)

      best be paying SE Tax/FICA-like taxes.

      Self-employed people

      A tax similar to the FICA tax is imposed on the earnings of self-employed individuals...
      Under the SE Tax Act, self-employed people are responsible for the entire percentage of 15.3% (= 12.4% [Soc. Sec.] + 2.9% [Medicare]); however, the 15.3% multiplier is applied to 92.35% of the business's net earnings from self-employment, rather than 100% of the gross earnings; the difference, 7.65%, is half of the 15.3%, and makes the calculation fair in comparison to that of regular (non-self-employed) employees. It does this by adjusting for the fact that employees' 7.65% share of their SE tax is multiplied against a number (their gross income) that does not include the putative "employer's half" of the self-employment tax. In other words, it makes the calculation fair because employees don't get taxed on their employers' contribution of the second half of FICA, therefore self-employed people shouldn't get taxed on the second half of the self-employment tax. Similarly, self-employed people also deduct half of their self-employment tax (schedule SE) from their gross income on the way to arriving at their adjusted gross income (AGI). This levels the amount paid by self-employed persons in comparison to regular employees, who don't pay general income tax on their employers' contribution of the second half of FICA, just as they didn't pay FICA tax on it either.[9][10]

      Republicans: "Double your pleasure, double your fun, double your National Debt, and blame 'The One' "

      by Bluefin on Wed Nov 10, 2010 at 01:55:56 AM PST

      [ Parent ]

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