The future of Social Security and Medicare generates a lot of debate and political posturing. Analysts...

The future of Social Security and Medicare generates a lot of debate and political posturing. Analysts predict that, without significant change, Social Security and Medicare funds will be exhausted at some future date (the date depends on the expert). The exercise asks you to use linear trends based on Social Security Administration historical data in order to estimate when, if ever, the funds will be in trouble (i.e., when disbursements will exceed income).

Social Security income for the years 1990-2000 suggest that the income trend can be estimated by the equation

y = 21.27x + 264.5

where x is the number of years since 1990 and y = annual income in billions of dollars. For the same years, the Social Security disbursements have the linear trend

y = 13.28x + 226.59.

(a) Find the point where income = disbursements. (Enter your answer as an ordered pair. Round your answers to two decimal places.)

(x, y) =

(b) Does this suggest that Social Security is going broke?

YesNo

(c) What other factors might influence the trend that would cause it to deviate from the linear trend?
The data for 1990 - 2003 is based on the populations that pay into the Social Security fund and those that secure payments from the fund. The relative size of these populations will change as Baby Boomers retire. The Baby Boomers are the generation for which there was a significantly higher birth rate. As they retire, the population of Social Security recipients will ---Select--- increase decrease and those paying into the fund will ---Select--- increase decrease . Thus, income will ---Select--- increase decrease and disbursements will ---Select--- increase decrease . This effect is not included in trends based on past income and disbursements.

Expert Solution

orchestra answered 2 years ago

1. Social Security, Federal & State unemployment taxes, Income Taxes Social Security Medicare Use the terms...

1. Social Security, Federal & State unemployment taxes, Income Taxes Social Security Medicare Use the terms in bold and pair them with the statements below The two parts of FICA Taxes paid by both the employer and employee Applies at an even rate to all wage income In 2015, applied only to the first $118,500 of wage income Paid by the employee only The rate varies depending on the employee's income Paid by the employer only

This problem is make sure you understand Social Security, Medicare, and Additional Medicare Contribution Taxes. Alice...

This problem is make sure you understand Social Security, Medicare, and Additional Medicare Contribution Taxes. Alice is an employee of XYZ Inc. Alice’s annual compensation is $295,000. Alice’s filing status is married filing jointly. Her federal income tax withholding was $60,000. Answer the following questions: 1. What is the total business deduction for XYZ Inc? 2. What is the total amount of taxes paid on behalf of Alice to the federal government for income taxes and payroll taxes? 3. What...

Which of the following is true about Social Security and Medicare taxes as they pertain to...

Which of the following is true about Social Security and Medicare taxes as they pertain to earnings limits? (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect.) Once an employee's year-to-date earnings exceed the wage...

The tax base for Social Security and Medicare taxes is wages. a. What is the 2019...

The tax base for Social Security and Medicare taxes is wages. a. What is the 2019 total Social Security tax rate? Of this total rate, what is the rate paid by employees? What amount of wages is subject to this tax in 2019? b. What is the 2019 total Medicare tax rate on wages paid by both employers and employees together? What amount of wages is subject to this tax in 2019? Starting in 2013, an additional Medicare Tax of...

The personal income tax, corporate income tax, and contributions to social insurance (Medicare and Social Security)...

The personal income tax, corporate income tax, and contributions to social insurance (Medicare and Social Security) together makes up approximately ______ of all federal government tax revenues annually (based on annual data from the period 2010-2015.) A. 95% B. 65% C. 45% D. 15% E. 4.5%

Look up the current 2020 caps for social Security and Medicare? What are they for each ...

Look up the current 2020 caps for social Security and Medicare? What are they for each -Which tax provides for medical benefits? A. FICA tax B. Federal income tax C. Social Security tax D. Medicare tax -Employers use the information on Form W-4 to compute income tax withholding. Net pay A. is more than gross pay. B. is also known as take-home pay. C. is gross pay minus 7.65%. D. depends on how much the employee wants to pay in...

Assume that the social security tax rate is 6% and the Medicare tax rate is 1.5%....

Assume that the social security tax rate is 6% and the Medicare tax rate is 1.5%. In the following summary of data for a payroll period, some amounts have been intentionally omitted: Earnings: 1. At regular rate ? 2. At overtime rate $60,000 3. Total earnings ? Deductions: 4. Social security tax 31,200 5. Medicare tax 7,800 6. Federal income tax withheld 130,000 7. Medical insurance 18,200 8. Union dues ? 9. Total deductions 194,700 10. Net amount paid 325,300...

For each of the following employees, calculate both the Social Security tax and the Medicare tax...

For each of the following employees, calculate both the Social Security tax and the Medicare tax for the weekly pay period described: NOTE: For simplicity, all calculations throughout this exercise, both intermediate and final, should be rounded to two decimal places at each calculation. 1:Bradley Banks' filing status is qualifying widower, and he has earned gross pay of $1,510. Each period he makes a 401(k) contribution of 9% of gross pay and makes a contribution of 3% of gross pay...

The payroll register of Seaside Architecture Company indicates $870 of social security and $217 of medicare...

The payroll register of Seaside Architecture Company indicates $870 of social security and $217 of medicare tax withheld on total salaries of $14,500 for the period. Assume earnings subject to state and federal unemployment compensation taxes are $5,250. at the federal rate of 0.8% and state rate of 5.4%. Provide the journal entry to record the payroll tax expense for the period. For a compound transaction, if an amount box does not require an entry, leave it blank or enter...

The payroll register of Seaside Architecture Company indicates $970 of social security and $257 of Medicare...

The payroll register of Seaside Architecture Company indicates $970 of social security and $257 of Medicare tax withheld on total salaries of $16,500 for the period. Federal withholding for the period totaled $4,235. Required: Prepare the journal entry for the period’s payroll. Refer to the Chart of Accounts for exact wording of account titles. CHART OF ACCOUNTS Seaside Architecture Company General Ledger ASSETS 110 Cash 111 Accounts Receivable 112 Interest Receivable 113 Notes Receivable 115 Inventory 116 Supplies...

Question