And that's on top of the fact that Social Security payments are already disproportional to the amount paid in. If you compare two people, one who earns income at the SS cap and pays the absolute maximum SS tax throughout his career and one who earns and pays half as much, the higher earner would make 50% more in SS payments as opposed to 100% more if he was paid proportionally to his taxes paid.
Would anyone accept a savings account or investment paid non-proportionally like that? That disproportionality is either an undeserved tax on the high earner, or an unearned benefit for the lower earner.
And those are just two points. The disproportionality becomes worse as you go further down the scale.
I think it would be interesting to see at what income the benefit vs. tax curve matches the total payment ratio which would define the point where the retiree is paid his share, no more and no less.
Yes. But then, income taxes are also “means tested.” The more you earn, the higher the tax rate.