MEDICARE TAX Meaning and
Definition
-
Medicare tax refers to a specific type of tax that is levied to finance the Medicare program in the United States. Medicare is a federal health insurance program primarily designed for individuals who are 65 years and older, as well as certain younger individuals with specific disabilities. The tax is collected from both employers and employees to help fund the healthcare benefits offered by Medicare.
The Medicare tax is imposed on the earned income of individuals, including salaries, wages, and self-employment income. As of 2021, the Medicare tax rate is set at 1.45% for both employees and employers, resulting in a combined rate of 2.9% for self-employed individuals. High-income earners may also be subject to an additional Medicare tax of 0.9% on earnings exceeding certain thresholds.
The revenue generated from the Medicare tax is deposited into the Medicare Hospital Insurance (HI) Trust Fund, which is responsible for covering the costs associated with Medicare Part A, mainly hospitalization expenses. The Medicare tax serves as a funding mechanism to ensure that Medicare remains financially sustainable and can provide healthcare coverage to eligible individuals in the United States.
It is important to note that the Medicare tax is separate from the Social Security tax, although both are often withheld concurrently from employees' paychecks. The Social Security tax goes towards funding the Social Security retirement program, while the Medicare tax is specifically dedicated to financing the Medicare program.
Common Misspellings for MEDICARE TAX
- nedicare tax
- kedicare tax
- jedicare tax
- mwdicare tax
- msdicare tax
- mddicare tax
- mrdicare tax
- m4dicare tax
- m3dicare tax
- mesicare tax
- mexicare tax
- mecicare tax
- meficare tax
- mericare tax
- meeicare tax
- meducare tax
- medjcare tax
- medkcare tax
- medocare tax
- med9care tax
Etymology of MEDICARE TAX
The word "Medicare" is derived from combining the terms "medical" and "care". "Medi" comes from the Latin word "medicus", meaning "physician" or "healing", while "care" originated from the Old English word "caru", which means "anxiety" or "sorrow".
The term "tax" has Middle English and Old French origins as "taxe" or "tache". It evolved from the Latin word "taxare", meaning "to assess" or "to handle".
Therefore, the etymology of "Medicare tax" combines the concept of medical care with a financial assessment or handling, indicating a tax specifically designated for funding Medicare, a government health insurance program for people aged 65 and older in the United States.
Infographic
Add the infographic to your website:
