Tuesday, March 25, 2008

How to Avoid Paying Social Security and Medicare Taxes


Google filed their 2008 Proxy statement, which means we get to take a sneak peak at what they paid their senior management in 2007. What might at first seem like a model for over-paid CEOs everywhere, it doesn't take long to see how they are skirting their fair share of taxes.

Eric Schmidt
Salary: $1
Bonus: $1,898
Other: $474,662 (security) + $4,000 (plane)

Sergey Brin
Salary: $1
Bonus: $1,723
Other: $0

Larry Page
Salary: $1
Bonus: $1,723
Other: $0

With a little remedial math, the current FICA rates, and a calculator we can see that Google's three senior managers paid a combined $331.51 in social security and $77.53 in Medicare taxes. So if you made more than $5,347 last year, you paid more in social security and Medicare taxes than three of the richest people in America combined.

Social security taxes are capped at a maximum of $6,045 for year 2007. There is no cap to Medicare taxes. You would think a company that vows to "do no harm" would at least pay their managers the $97,500 base wage that would allow them to make the maximum contribution to social security and fulfill their responsibility to the society that has allowed them to become overnight billionaires.

3 comments:

Anonymous said...

Obviously the 2 founders are billionaires if you look at their goog stock holdings. So they really don't need a salary. However, it would be a nice gesture to the American public for them to pony up the max contribution to FICA given the sorry state of our social security system. Granted their $6 k won't save social security, but at the same time their $97,500 salary won't impact google in any material way either.

Anonymous said...

Treasury Secretary Henry Paulson said today that Social Security is "financially unsustainable". So any little bit the google crew contributes will help.

http://money.cnn.com/2008/03/25/pf/soc_sec_trustees_report/index.htm?postversion=2008032517

Locomotive Breath said...

Bravo. Good catch.

And while I applaud any individual or corporation that can legally find ways to not piss their money down the bottomless federal govt. pork trough, I find the googlag/yahoo dis-information conglomerate doubling troubling for their infamous actions of scrubbing 'conservative' search results in favor of leftist links, and how they frequently aid & abet fascist regimes and their brutal dictators with censorship & information leaks in order to suppress, imprison & torture dissident citizens (most notably, China).

Marxism for you & me, but not for googlag/yahoo - Don't be evil.

Thanks again for the link.