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Path: utzoo!linus!philabs!cmcl2!seismo!hao!hplabs!hp-pcd!john
From: john@hp-pcd.UUCP (john)
Newsgroups: net.taxes
Subject: Re: SS deduction
Message-ID: <53400014@hp-pcd.UUCP>
Date: Mon, 15-Apr-85 18:23:00 EDT
Article-I.D.: hp-pcd.53400014
Posted: Mon Apr 15 18:23:00 1985
Date-Received: Sun, 28-Apr-85 07:19:39 EDT
References: <121@pyuxh.UUCP>
Organization: Hewlett-Packard - Corvallis, OR
Lines: 22
Nf-ID: #R:pyuxh:-12100:hp-pcd:53400014:000:959
Nf-From: hp-pcd!john    Apr 25 15:23:00 1985

<<<

   I suppose that most of the net has already given up any hope of ever
seeing any money come back from social security, but you should consider
what happens if you do.

   If you make more than a certain amount then up to 50% of your social
security is taxed and added to your adjusted gross income. The way this 
is computed does some funny things to your marginal tax rate. Normally
if you go out and earn one additional dollar it will add one dollar to
your adjusted gross income and you pay 1 times your marginal rate more
tax dollars. With Social security you could find that each additional
dollar you earn adds one dollar to your adjusted gross PLUS kicks an
additional 50 cents of Social security from non taxed to taxable. Your
marginal tax rate now is 50% higher than before.

   Your total tax dollars paid is less than if social security were fully
taxed but after all this is the second time you paid it. 


John Eaton
!hplabs!hp-pcd!john