What must be considered in computing FICA (i.e. wage limit, pretax items, etc.)? Be specific and explain why these items must be considered. Continuing with Continuing Payroll Problem B on page 3-66, how is the taxable earnings calculated for each employee (do not just give the formula, show your work)? Calculate the amount of FICA taxable earnings and FICA deduction for each employee. Each person show the work for one hourly and one salaried employee only.
Explain two of the six criteria for policy prescription, (a) effectiveness, (b) efficiency, (c) adequacy, (d) equity, (e) responsiveness, and (f) appropriateness. Then, describe a real or hypothetical public policy issue and select which of the two criteria you believe would be the most beneficial to use in deciding a policy. Provide at least two reasons for your selection.
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