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Agreed, although (a) the fact that social security is the "third rail of politics" suggests that while it's not a contractual obligation like employee retiremen
by cperciva 5y ago
Agreed, although (a) the fact that social security is the "third rail of politics" suggests that while it's not a contractual obligation like employee retirement benefits, it's effectively an unavoidable obligation; and (b) even if the future value of benefits to be paid out isn't recorded as a liability, the social security taxes paid should probably be treated as "deferred revenue" since that revenue is at least theoretically being gathered for the purpose of paying the future benefits in question.
- rahimnathwani 5y agoYes, taxes collected by govt effectively go into a single pool. The money is not ringfenced for particular purposes. Both in the UK (where I'm from) and in the US (where I live now), there are separate taxes ('social security' in the US, 'national insurance' in the UK), but the AFAICT this is just a trick to obscure the true rate of payroll/income taxes.