Social Security a Net Loss for those who make more than $65K per year

[boedicca]

An interesting tidbit near the end of the article at the link:

Today, anyone making more than $65K per year will receive less in benefits than they pay in SS taxes (and this is before reform).

If any factoid makes a stark case for privatizing SS along a Chilean style model, this does. How disgraceful that a middle income person should pay into an (Orwellian) retirement income insurance fund with absolutely No Return on Investment.

[i\Here is additional data put together by Andrew Biggs at the American Enterprise Institute. He looks at the “net tax rate” for Social Security — that is, the statutory 12.4 percent Social Security tax paid by workers minus the benefits they receive from the program. A negative net tax means that the people in the quintile receive on average more benefits than they pay in taxes in the course of their lives. A positive net tax means that less benefits are received than taxes are paid.

The table shows that the two top quintiles paid more in taxes than they receive in benefits. Based on income distribution data from the Tax Policy Center, for 2008 (most recent IRS data) the second quintile begins at cash income of $18,725; the middle quintile at $37,257; the fourth quintile at $65,634; the 80th percentile at $110,346. I suspect that very few people realize that anyone making above $65k pays more in Social Security taxes than they receive in benefits.[/i]

Redistribution of Income: Not From the Rich to the Poor But From the Young to the Old - By Veronique de Rugy - The Corner - National Review Online

 

[Norman]

Why should anyone get return on taxpayer's back via retirement plan that invests nothing, and thus should give no returns?

 

[Trajan]

An interesting tidbit near the end of the article at the link:

Today, anyone making more than $65K per year will receive less in benefits than they pay in SS taxes (and this is before reform).

If any factoid makes a stark case for privatizing SS along a Chilean style model, this does. How disgraceful that a middle income person should pay into an (Orwellian) retirement income insurance fund with absolutely No Return on Investment.

[i\Here is additional data put together by Andrew Biggs at the American Enterprise Institute. He looks at the “net tax rate” for Social Security — that is, the statutory 12.4 percent Social Security tax paid by workers minus the benefits they receive from the program. A negative net tax means that the people in the quintile receive on average more benefits than they pay in taxes in the course of their lives. A positive net tax means that less benefits are received than taxes are paid.

The table shows that the two top quintiles paid more in taxes than they receive in benefits. Based on income distribution data from the Tax Policy Center, for 2008 (most recent IRS data) the second quintile begins at cash income of $18,725; the middle quintile at $37,257; the fourth quintile at $65,634; the 80th percentile at $110,346. I suspect that very few people realize that anyone making above $65k pays more in Social Security taxes than they receive in benefits.[/i]

Redistribution of Income: Not From the Rich to the Poor But From the Young to the Old - By Veronique de Rugy - The Corner - National Review Online

Yup, that WSJ article they reference is what I read and remarked on in Toros SS thread.


here-

That’s right: There isn’t a bank account with people’s names written on it, nor is there a lock box that contains extra payroll taxes collected since the 1980s. The money is gone and has been spent over the years on things like roads, student loans, wars, and farms subsidies. If Medicare and Social Security are going to pay out benefits promised to people by lawmakers, money will have to be borrowed or taxes will have to be raised to make up the difference between the promise and the taxes collected.

this is how they get away with not giving a surviving spouse both payments, the survivors and the dead spouses, because it was " intended for the individual" account holder, but not for another individual even though they may have been married for years and that withholding effected them both equally in the shared domicile, this is, in the end, dishonest.