Social Security is another government program that we seem to never want to fix until the very last moment. I have blogged about it multiple times, but I never really talk about the fun one could have with all of that money if the tax went away.
The Tax - 6.2% of the first 106,800 you make. If self employed, like my wife, it is the full 12.4%. Don't stop with the straight taxes. Your employer must pay 6.2% of the 106.8K to the government. If we eliminated SS, you would have 6.2% at the least in your pocket. If employers were to consider that 6.2% part of ee costs and therefore part of hiring you, you could potentially see 12.4% more in earnings. Most likely you would see a portion of that ER 6.2% in luring you to their company.
There is a downside: you have to save for your own retirement. You have to plan for disabilities that might put you out of work or reduce earning potential. You have to take responsibility. That is pretty heavy stuff, but it is something adults used to do all of the time.
Retirement is more of a modern invention. You used to work until you died, and often you died 'young'. SS used to start at age 65 as a means of alleviating elderly poverty. It was for those whoe couldnt work as much or at all (some who never worked), not providing all of a person's retirement income. It started at age 65 as that was the expected lifespan of Americans at that time. Social Security does good things like provide an income stream for people with serious illnesses and poor old people. Odd thing is the wealthiest demographic group in America has been 'the elderly' for quite a while. We should have been means testing the Greatest Generation back in the 80s and 90s. Damn!
If I could have 12.4% of my income handed over to me for my own use, I'd probably put half of it in liquid, low risk bond & precious metals holdings, and then use the other half towards a swimming pool and assorted present day consumption. A inground swimming pool would be great, and combined with extra sacrifice now I could get one in 2-3 years! That is all saving money vs. spending money is. You trade consuming now for consuming later. People relinquished that when SS came along, and the right to pick when you would spend your money was curtailed. First it was 1%, and now it is all the way up to 12.4%. While the Greatest Generation made out like bandits by paying in 1% and then reaping benefits while others paid 10%+, the true thieves were the people who got SS when it started without ever paying into the system. I've got a sneaky feeling we'll be seeing this discussed more. I bet they start with means testing the wealthy which will screw over anyone earning over 250K annually even more than the current tax laws. Then it will be moved 'down'. Let's see what the 'elites' have brewed up for us.