1) Yes the amount in box 1 has not been reduced by the amount of social security and medicare tax withheld. Box 1 may be reduced by other things such as 401K contributions entered in box 12. That's why you may see that box 1 is less than box 2 and 3.
2) The tax you pay is an income tax paid on the amount of taxable income. Many filers pay no income tax if they have no taxable income or have credits that offset their tax. Those filers who pay these taxes are funding the federal budget,. Social security and medicare taxes are called payroll taxes and are totally different taxes that all filers are required to pay. Those taxes fund the social security retirement benefits and medicare insurance that you get when you retire at a certain age.
3) Nothing reduces the amount of income that social security and medicare taxes are calculated from. There is a limit on how much income you must pay social security taxes on. For 2018 you had to pay 6.2% social security tax on up to $128,400 of income. Your employer matches that amount of tax. The medicare tax is 1.45% and there is no income limit. Your employer also matches that amount. There is an additional 0.9% medicare tax that high income employees must pay. Self employed filers must pay both the employee and employer's portion of the taxes so they must pay 15.3% of their net income.
