Final answer:
The SECA tax rate is B) higher than the FICA rate because self-employed individuals under SECA must pay the full amount of the taxes for Social Security and Medicare themselves, without an employer to share the cost.
Step-by-step explanation:
The SECA (Self-Employment Contributions Act) tax rate is higher compared to the FICA (Federal Insurance Contributions Act) rate. FICA taxes, which fund Social Security and Medicare, are split evenly between employers and employees, with each paying half. However, self-employed individuals must pay the entire amount themselves under SECA, effectively doubling the rate they must pay compared to employees. Specifically, the FICA tax rate is 15.3%, with 7.65% paid by the employee and 7.65% by the employer, while the SECA tax rate is the full 15.3% paid by self-employed individuals. This is because FICA is shared between the employer and the employee, while SECA is not.