What is social security tax?

Social security tax is also called "social insurance tax". Refers to a kind of purpose tax, which takes the wages paid by enterprises and the wages paid by employees and employers respectively as the object of taxation, and the tax is mainly used for various social welfare expenditures. This tax 1935 started in the United States and has become one of the main taxes in western countries. Judging from the social security taxes implemented in various countries, the proportional tax rate is generally implemented, and employers and employees apply the same tax rate, each bearing 50% of the total tax. Employers and employees in different countries apply different tax rates. Generally speaking, the tax basis is the wages and salaries actually paid by the employer to employees, and there is no reduction or exemption, but there is generally a tax ceiling, and wages exceeding the limit are not taxed. The tax payable by the employer shall be declared and paid by the employer, and the tax payable by the employee shall be deducted in advance by the employer when paying the employee's salary and paid regularly.

As a special form of income tax, social security tax is specially used for social welfare, security and other expenses. Compared with general taxation, it has three main features:

(1) is regressive. Social security tax adopts proportional tax rate, and there is generally no reduction or exemption. At the same time, there is a tax ceiling, regardless of special circumstances such as the number of taxpayers, which has a strong regressive nature;

(2) paid, social security tax is generally managed by a special fund set up by the government, designated for use, and earmarked for special purposes, so it is paid;

(3) Internal flexibility, the expenditure of social security tax is closely related to the economic situation in a certain period. When the economy is prosperous, the unemployment rate decreases, and the social security expenditure, especially the unemployment relief expenditure, decreases, which is conducive to curbing the total social demand; On the other hand, during the economic recession, the unemployment rate rises, and the social security expenditure, especially the unemployment relief expenditure, increases, which is conducive to stimulating the total social demand. Therefore, social security tax and its social security system have inherent elastic characteristics, and it can coordinate with income tax to play the role of automatically stabilizing the economy.