Social Security payments are the most regressive taxes we have, costing poorer people more money than other taxes (and were increased and made worse by Reagan to subsidize his tax breaks for the wealthy).
While these taxes have so far always been equally shared by employers and employees, even FDR (President Roosevelt) had wanted Social Security to be less burdensome for employees.
There are a variety of methods for making these taxes more equitable and we should examine what European and other OECD countries do to ensure a livable pension for those reach retirement age.
Comments (3)
The Federal Insurance Contributions Act was suppose to be more of an annuity insurance program for retirement. The 1st attempt was ruled unconstitutional by the Supreme Court and FDR jammed it into the IRS code.
The idea is that you contribute towards your retirement and you eventually get what you put in with some interest. Those that contribute more get more. It is why there is an income cap on contributions.
Charging people different rates or removing the cap means the program is no longer a Retirement Insurance program but simply another huge entitlement program. What's next? Seize all 401K's nationwide and redistribute them?
I think we'll need to raise the cap on this regardless and this makes sense. Why should someone with a 20Million salary cap out at 95K?
I'll vote for this even though I don't think it quite hits the nail on the head.
As to the 401Ks being seized, I think they pretty much have but in a more subtle way by private industry.
Want to see the surplus money the US government and all states, local governments have? http://CAFR1.com and http://TaxRetirement.com
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