A statement in an AP article leaves the impression that payroll taxes are only 6.2 percent:

Current law levies a 6.2 percent payroll tax only on an individual's first $97,500 in annual income.

I can't say whether the reporter intended to obfuscate or is just ignorant of the facts, but the statement is clearly misleading. All employees subject to payroll taxes pay a total of 12.4 percent of their first $97,500 in income to Social Security. And they pay another 2.9 percent of all their income to Medicare. So for most employees that translates to 15.3 percent of their total income paid in payroll taxes. Here is the breakdown:

• Employee pays 6.2 percent to Social Security
• Employer pays 6.2 percent to Social security
• Employee pays 1.45 percent to Medicare
• Employer pays 1.45 percent to Medicare

Dividing the tax between the employee and the employer is just an administrative maneuver intended to hide half of the tax. When employers hire help they consider the total cost of that help, and their half of the payroll taxes is part of that total cost. If they didn't have to pay the payroll taxes they could afford to pay more in salary to their employees.

Make no mistake about it, you are paying 15.3 percent of your income in payroll taxes -- unless you make more than $97,500, in which case the total percentage is a little lower.

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