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In theory, SS payouts to each individual are proportional to each individual's payments in. In that light what proper purpose is there in forcing higher wage e
by sk5t 7y ago
In theory, SS payouts to each individual are proportional to each individual's payments in. In that light what proper purpose is there in forcing higher wage earners to save more?
- gshubert17 7y agoThe relationship between average wages and SS benefits: those earning lower amounts receive a higher percentage of their wages as benefits, compared to those earning higher amounts. See [0]. Another way to view this is that there is a welfare component to Social Security. And then there is a component that is based on what you earn. This was the basic compromise when Social Security was created in the 1930s. The upper limit to FICA (Federal Insurance Contributions Act) taxes on wages, is a way to downplay the welfare aspect of Social Security. Some people think we should acknowledge the welfare aspect and go ahead and tax all wages (like the US does for Medicare), but others don't think that's fair to high wage-earners. [0] https://financialducksinarow.com/4414/social-security-income-replacement-rates/ https://financialducksinarow.com/4414/social-security-income...