Forum Thread

Average American pays more social security tax, what does that mean?

Reply to ThreadDisplaying 2 Posts
  • Are you sure you want to delete this post?

    If you consider income differences between the bottom 80% of earners and the top 20% of earners in the US, the top earners are always paying more in income taxes than payroll taxes. When it comes to payroll taxes, the average American worker pays 6.2% of their first $118,500. According to an article I read, the the U.S Treasury Department stated that everyone aside from the top 20% paid more in payroll taxes than in income taxes. Also, let's consider that Social Security tax is higher than income tax. Unlike income, when you file a tax return, credits and exemptions have no affect on Social Security Tax what so ever.

    So, where does that lead us when it comes to the future of Social Security, you ask?

    Social Security is taking in more money than it is paying out. Let's not forget Social Security trust funds and how little they are being reinvested, as well as how little their balances are growing. Also consider the baby boomer wave of retirees and the general trend of our population living longer, which means, in-turn, that benefits will begin to be paid out at a higher rate over time. According to the data, the entire Social Security program is expected to start losing money each year, beginning 2019, as well as the trust funds running out entirely in 2034. After that, the only revenue that will be flowing into social security will be taxes. If that is the case, then all Social Security revenue will mostly be dependent on the bottom 80% earners.

  • Are you sure you want to delete this post?
    I'm confused. Does this mean that the bottom 80% are all individually paying more per person on average for SS benefits than the top 20% of earners in the country?