Social Security is doing very well even though you’ll hear this constant whisper that “Social Security won’t be there for you”; well – if that ever comes to pass…it will be the single largest transfer of wealth from the working classes to the richest among us. You can read the Trustees report HERE. This doesn’t mean that it’s not without problems or that we can rest on our laurels; that would be far from the truth. But it doesn’t mean the sky is falling either Chicken Little. All we need is good governance and elected officials not intent in trying to sabotage the program so they can reward wealthy Wall Street donors by privatizing it and putting that money in the reach of Wall Street vultures.
Reuters explains the evolution of the payroll tax – article HERE:
Let’s look at how Social Security taxes have grown in the last half century — a little-known tale of tax burdens shifted off the rich and onto workers. From 1961 through 2011, the year covered in the last Social Security report, Social Security taxes exploded from 3.1 percent of Gross Domestic Product to 5.5 percent.
Income taxes went the other way. The personal income tax slipped from 7.8 percent of the economy to 7.3 percent, with most of the decline enjoyed by people in the top 1 percent of incomes. The big drop was in the corporate income tax, which fell from 4 percent of the economy to 1.2 percent. Notice that the corporate income tax fell by 2.8 percentage points, an amount almost entirely offset by a 2.4 percentage point increase in Social Security taxes.
The effect has been to ease the taxes of the wealthy, while burdening the vast majority of workers. Considering how highly ownership of stocks is concentrated, the benefit of those lower corporate taxes went overwhelmingly to the top 1 percent and, especially, the top 1 percent of the top 1 percent. Considering that the Social Security tax is capped, most of the burden of the increased payroll tax went to the bottom 90 percent.
There is a reason that so many types of taxes exist…and so many types of deductions as well. It used to be to stimulate various forms of growth to benefit the economy…now those tax credits and varying taxes on types of incomes are essentially corruption. As we have explained HERE - it’s time to eliminate the payroll tax completely and just treat all incomes equally..taxing according to income.
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