They still pay payroll taxes, among others, which disproportionately affect poor people.

phyzix5761 38 minutes ago | parent | next [-]

I 100% agree. Roosevelt implemented that in 1935 and it was meant as a safety net for social security. Economists estimate that by 2035 social security, as its currently structured, will no longer be able to fund the aging population.

Instead, a better alternative is to invest that same amount into an ETF that tracks the S&P 500 and after a 40 year working career the individual would have almost $5 million assuming a median wage and current employer matching on payroll tax. This would give them a yearly $200k payout which grows at 6% per year if they follow the 4% rule on withdrawals, lasting them indefinitely and leaving something behind for their children when they pass away. In contrast, social security right now, on average, pays $26k per year.

This would also generate federal taxes through transactions of the companies composing the S&P 500 which would give the government an additional tax revenue source.

	▲	smallmancontrov 5 minutes ago \| parent [-]
		The trouble with "investments did better" is that they did so in considerable part due to 40 years of trickle down economics that swung the pendulum away from labor and towards capital. The pendulum is slowing, so that trick is extremely unlikely to work twice. If that's not concrete enough for you, we can talk about what it would take to swing the pendulum as far in the next 40 as we did in the last 40 and this thought experiment will make it obvious that this approach makes the social security trust fund look like an exercise in sustainability.

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giantg2 40 minutes ago | parent | prev [-]

Payroll taxes were capped because the related benefits were capped. We could uncap either or both ends of that. Although removing the cap should have been unnecessary if the government acted responsibly, and the removal of the cap would not force them to act responsibly in the future.