Who pays for Social Security, Medicare and other 'entitlements' offered by government?
We do, that's who.
And do the rich get a windfall?
Of course not. They pay the most for receiving the least in the form of government mandated 'benefits.'
Keenan posted today about value for money. In other words, we produce, get paid for what we produce, and then voluntarily spend or trade much of what we get paid for things that others have produced.
Except, of course, what the government takes from us and other producers, or confiscates in the name of 'helping' make us a better and more equal society, as the case may be.
And who decides what's fair?
My Sorry Social Security Return has some fact based numbers for those wanting and willing to see the truth:
"One commonly held belief about the Social Security system is that baby boomers and the generation that preceded them are making out like bandits, draining both the Social Security and Medicare trust funds and leaving little for younger generations.
It is also widely believed—fervently so in some quarters—that the rich don’t pay their “fair share” of Social Security, since the earnings subject to the program’s taxes are capped each year. (The maximum amount of taxable earnings this year is $118,500.)
Do these notions—particularly the latter—stand up? Last month I turned 70 and, thanks to my earnings, became entitled to Social Security’s maximum benefit, currently $3,500 a month, or $42,000 a year. And so, if I live to 90, I will receive $840,000 worth of (inflation-adjusted) benefits.
Over the past 50 years, according to the Social Security Administration, the combined taxes paid into the system by me and my employers equaled $329,640.
This sounds like a good deal—the benefits I would collect over the next 20 years are more than twice what I put in. But the benefits are only about one-third the $2.27 million I would have accumulated had the taxes instead been invested, over time, in a stock index fund.
Moreover, the benefits I would collect are even less than the $1.28 million I would have accumulated if my “contributions,” as Social Security taxes are euphemistically called, had been placed in U.S. Treasury bonds. This number is particularly important, because the Social Security Administration bought government bonds with my (and others’) taxes to build up its trust funds. In effect, the government made almost one-half million dollars more on my Social Security taxes than they will pay me if I live another 20 years.
What about Medicare? Over the past half century, my Medicare taxes exceeded $1 million, more than three times my Social Security taxes. That’s because since 1994 there has been no cap on the income subject to Medicare taxes. I have calculated that these taxes, invested in Treasury bonds, would now have accumulated to almost $1.75 million.
I do not know the most expensive health-care coverage that I could buy at my age, but the so-called “Cadillac” coverage, upon which the government will apply a stiff surtax, is $10,200 a year. Even if I purchased super-premium, all-inclusive medical coverage that cost $20,000 or even $30,000 a year, I will never begin to make back the money that I paid the government to take care of my medical needs.
There’s another issue. As I continue to work, I will pay both Social Security and Medicare additional tens of thousands of dollars. I won’t get any extra benefits from these taxes.
So are affluent seniors making out like bandits? Not at all. The bandit is the federal government, which provides benefits that are millions of dollars short of what anyone whose earnings are at or above the tax cap easily could have accumulated on his own.
Mr. Siegel is a professor of finance at the University of Pennsylvania’s Wharton School."
Summing Up
Facts are stubborn things --- but they are facts.
And fairness is always subjective and as seen by the individual taxpayers, other voters, interested bystanders, or the elected government takers, as the case may be.
That's my take.
Thanks. Bob.
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