Clever, Ray-man - you caught me in a rare moment of grammatical sloppiness. Allow me to correct my gaff:
The fact that contributions are capped each year does NOT make SS a regressive tax. The cap on contributions is simply the result of the fact that benefits are capped.
The rest of your post, however, is completely without merit.
Again, SS and Medicare contributions are NOT a tax, in spite of the common label "payroll tax." They are contributions made by workers and employers toward retirement and health care benefits, just like private pensions and health plans except, perhaps, not as efficient.
As for regressiveness, there is absolutely NOTHING regressive about two people making the same contributions and getting the same benefits, your twisted logic and irrelevant examples notwithstanding.
The major argument for "progressive" taxation, the argument accepted by many Americans who reject the socialist notion of income and wealth redistribution, is higher income people should pay at a higher rate because they benefit disproportionately from the freedom and opportunity our government promotes and protects. Never mind the validity of that argument for progressive taxation - let's just assume it's true that higher income people really ARE paying in proportion to the benefit they receive. That is clearly ALSO the case with Social Security and Medicare - people pay in proportion to the benefit they receive.
In your example of three people paying the same $13,331 into Social Security, they get EXACTLY the same benefit. The calculation of "effective" rates based on their total income is irrelevant - their benefits are not based on total income, but rather on exactly the same income, $87,000.
SS and Medicare payments are neither a tax nor regressive - they are payments toward benefits and the payments are proportional to the benefits. Pretty simple, really, Ray-man. |
