I totally agree, except that Self Employment tax is now 15% right off the top even before taking any deductions. Essentially, you are paying the normal 7.5% that you would have paid if working for an employer, plus the 7.5% matching amount that the employer would have paid on your behalf.<quoted text>
You are absolutely right. I paid LOTS of money into social security and medicare tax...for 39 years. In addition I paid an extra 13%(I think) for self employment tax. That sure broke my piggy bank. I loved my work and would have gladly continued if I had not become legitimately disabled....and no I don't draw a "crazy check," it's for physical disability.I am certain that what I draw out won't even come close to what I put in for all those years. Had I been able to invest it instead, I would have had much more money to fall back on now.
What most people do not realize is that not only do they pay into Social Security and Medicare, their employer pays a matching amount. That is why many companies "down-size". For every $10 paid to a worker, the average cost to the company in government payments and benefits is around $14 and that is even before the corporation has to pay corporate taxes.
I worked the last 10 years of my career as a self employed contractor even though I only worked for one company. It benefited the company financially in that they did not have to pay SS and Medicare or health benefits or for Worker's Compensation insurance or into Unemployment benefits. If they did not need me any more, it was just the end and I could not even draw unemployment compensation.