A simpler example: social security taxes hit a cap at a bit under $200,000/year. Somebody working fast food at minimum wage is paying 6.2% on every dollar they earn, while with my fancy tech job I’m paying a substantially lower percentage.
A simpler example: social security taxes hit a cap at a bit under $200,000/year. Somebody working fast food at minimum wage is paying 6.2% on every dollar they earn, while with my fancy tech job I’m paying a substantially lower percentage.
The social security "tax" should really be conceptualized as an investment, not a tax. The typical fast food worker has probably not passed the first bend point in the Social Security PIA formula, meaning that social security is giving them 90 cents on the dollar*. You, with your fancy tech job, are likely well past the second bend point: social security is only giving you 15 cents on the dollar* (and nothing, obviously, for earnings beyond the payroll tax ceiling).
It's a progressive system overall - but it wasn't designed for the purpose of wealth redistribution, hence the payroll tax ceiling.
* More precisely, their monthly benefit at full retirement age increases by 90 cents for each additional dollar of pre-retirement average monthly earnings, whereas yours only increases by 15 cents.