Question

Which of the following are types of taxes employers would match? (all that apply)

A) State income taxes

B) Medicare taxes

C) Federal unemployement taxes

D) Social Security taxes

Answer 1

Employers match Medicare and Social Security taxes but do not match federal unemployment taxes or state income taxes. Social Security tax is regressive due to the income cap, while the Medicare tax is proportional.

Step-by-step explanation:

The types of taxes employers would match are primarily related to payroll and employment taxes. Specifically, employers match the following taxes for their employees:

• Medicare taxes
• Social Security taxes
• Federal unemployment taxes (Note: employers typically pay this tax on their own, but do not match it)

Employers do not match state income taxes; these are paid solely by the employee. In terms of the Social Security tax, it is imposed at a rate of 6.2% on the employee's income up to a certain threshold (e.g., $113,000 as of the latest available information prior to the knowledge cutoff). This tax is considered regressive because individuals with higher incomes end up paying a smaller percentage of their income towards Social Security once their earnings surpass the threshold. The Medicare tax is typically considered to be proportional as it is levied at the same rate for all income levels without a cap.