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Originally Posted by ASU2003
That makes sense. Now, if the company board gives the CEO $1 million in stock that gets taxed at the income level when sold (~38.5%, I think), is this a way around medicare/social security taxes? If the board gave the CEO a salary of $1 million, there would be a bunch of other taxes, right?
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No, because all compensation (in even the form of stocks) still gets taxed.
Besides, once a person pays into SS the max per year, (which I am unsure what it is but I am sure someone who makes a few million easily maxes), the tax stops being taken out.
The only way out of SS is to either be an owner of a private company (like when I owned my Pizza shop) or independant contractor. You still pay taxes but they do not have to come out of your paycheck.
When I owned my pizza place I didn't pay a penny into SS/unemployment for myself... my business paid whatever it had to for the hourly employees... (had they been ind. contractors I wouldn't have had to pay for them either).
But, in my doing so my SS benefits and unemployment benefits were lost, because I didn't add into them.