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"SS is paid for by higher wages" Social Security taxes are capped at the first $142k earned. Any income beyond that is exempt from the tax, which means that th
by standardUser 5y ago
"SS is paid for by higher wages"
Social Security taxes are capped at the first $142k earned. Any income beyond that is exempt from the tax, which means that the top end of wages provide nothing to the program. Those income earners also happens to be the ones who can most afford an additional tax burden.
- jl2718 5y agoIrrelevant to statement. Higher average wages make the system more sustainable.
- s1artibartfast 5y agoEven someone at 142k is subsidizing the low earners.
- standardUser 5y agoAnd someone at $250k is paying a far lower effective payroll tax rate than someone earning $50k.
- s1artibartfast 5y agocorrect. I am not talking about effective rates. SS was originally sold as a personal savings plan, not a wealth redistribution plan. This is why payout is tied to contribution, and elders who didn't contribute are left to suffer in poverty. If we want it to act as to redistribute wealth, we should simply scrap it and replace it with an income tax and means tested benefit.
- CincinnatiMan 5y agoAt the same time, SS disbursements are capped as well. So both input and output are capped.