Which of the following statements about the financing of the Social Security programs is (are)true?
I.Although the self-employed pay an OASDI tax rate that is twice the employee rate,they are allowed certain deductions that reduce the effective tax rate.
II.The earnings base on which OASDI taxes are paid increases annually based on changes in average wages in the national economy.

Question

Quizplus · Accepted Answer

Statement I is true as self-employed individuals pay both the employee and employer portion of the OASDI tax, resulting in a higher effective tax rate. However, they are allowed certain deductions such as half of the self-employment tax paid, reducing their overall tax burden. Statement II is also true as the earnings base on which OASDI taxes are paid is indexed to average wages and increases annually.

Which of the Following Statements About the Financing of the Social