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New Social Security
Tax Rate
On January 1, 1962, a new social security tax rate goes into effect for nine out of ten working people.
For employed people the 1962 rate is 3 1/8 percent for employee and employer, a total increase of one-fourth of 1 percent. For selfemployed people, the new rate is 4.7 percent, an increase of threesixtenth of 1 percent. The maximum taxable earnings remain $4,800 during the tax year in earnings, net income from selfemployment, or a combination of both. In dollars and cents the increase means that an employed person earning $4,800 or more during 1962 will pay $150 in social security, tax instead of the $144 he j paid on these earnings in 1961. With 52 weekly checks totalling . $4,800, about 12 cents more will \ be withheld from each check. His employer’s tax will also be about , 12 cents more a week.
A self-employed person netting as much as $4,800 will .pay] $225.50 instead of $216 for the . year. Spread over 12 months, this . is about 79 cents more a month, or , by the quarter, $2.38 more. -fa-line with its policy of setting a schedule of social security tax ( rates sufficient to meet the cost of j all present and future insurance , benefits, the Congress provided for , the increase to finance four signifi- , cant program changes effective I with the 1961 amendments signed by President Kennedy last last | June. These changes— ,
1. Enable men to apply for re- . duced old-age insurance benefits at 62. ,
2: Increase by about 10 percent monthly benefits due 62-year-old or older widows getting benefits on the accounts of their husbands, dependent widowers, and dependent parents.
3. Raised the minimum old-age benefit payable to a 65-year-old or older retired worker or to a sole survivor of a deceased worker from $33 to $40 a month, with cor- , responding increases for dependents and other survivors of workers due less than $40. a month in , unreduced benefits under the old ] law. !
4. Reduce the amount of work , needed to qualify for benefits, , allowing many workers, depend- | ents, and survivors who were not _ eligible under previous work requirement provisions to get benefits.
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