than letting gabillionaires like Elon Musk put practically none of their massive incomes into" Social Security, Jim Hightower writes at CounterPunch, "make them pay Social Security taxes exactly like regular workers do."
As is always nearly the case when discussing Social Security, there's quite a bit to unpack, but let's start by congratulating Hightower on the fulfillment of his wish, long before he even expressed it:
Elon Musk DOES pay Social Security exactly like regular workers do.
Regular workers pay 12.4% -- half directly and half theoretically from their employers, but thereby reducing the money available for wages -- in Social Security tax on every dollar of income they earn up to $176,000.
Elon Musk (and other "gabillionaires") also pay 12.4% in Social Security tax on every dollar of income they earn up to $176,000.
$176,000 isn't the only Social Security "cap." There's also a maximum benefit amount. Elon Musk (and other "gabillionaires"), just like regular workers, can potentially receive a maximum monthly payout of $5,108 if they wait until the age of 70 to retire.
Hightower doesn't really want to treat Elon Musk just like a regular worker. He wants Musk to pay more, without receiving a commensurate increase in return, so as to subsidize the retirements of those regular workers.
He wants, in the common parlance, to "redistribute wealth," in the form of retirement income.
Social Security already does that, but in a different direction: It forces black men to subsidize the retirements of white women.
The average life expectancy of a black man in America is 68 years, which means that the black man who doesn't retire early receives a whopping one year of Social Security checks before shuffling off this mortal coil. Kind of a raw deal, huh?
The average life expectancy of a white woman in America is 81.1 years, which means that even the white woman who works to the maximum retirement age of 70 receives more than 11 years of those payments. Sweet deal, huh?
To add insult to injury, the labor participation rate of white women is lower than that of black men -- in part because our culture still encourages "one-income households" after marriage with the man as "breadwinner" -- so white women work fewer years before retirement, but enjoy more years after retirement, at the financial expense of black men.
If Hightower merely suggested reversing the flow of wealth redistribution -- from bottom-up to top-down -- I'd still call shenanigans, but he instead characterizes the Social Security Ponzi scheme as "an egalitarian effort to provide a decent retirement for all," which it isn't now and never has been.
The best thing to do with Social Security, if "decent retirements" is the goal -- and, more importantly, if individual freedom and choice are the criteria -- is eliminate it.
"Regular workers" and their households earn an average annual return on their involuntary Social Security "investment" of 1.23%. Actually investing that 12.4% of income in an S&P 500 indexed mutual fund produces an average annual return of 10%.
Instead of taxing the "gabillionaires" more, tax everyone at 0% and let the market make them prosperous.
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