For most working folks, the majority of your taxes are social security, certainly the majority of your federal taxes. The tax structure of SS is strongly weighted to help the rich. This is a fact that politicians have created and typically hide. Both parties proclaim tax help for the middle class, by instituting income tax changes that barely affect anyone, and really sticking it to the low wage-earner and middle class by a highly recessive SS tax that charges 14.2% off the top for a self-employed person, or 7.1% for an employee, but only to a cut-off of $160,000.

Anyone making more than this pays nothing on the overage, with the result that high earners, on a percent basis, pay essentially 0% tax. The rest of the high eaters income is generally protected by deductions. His car is a work expense, rented from the company, his travel is too. The working plumber benefits from these same deductions, but ends up paying 14.2% because of Social Security, while someone earning $1.6 million ends up paying 1.42% effectively.

People earring more than $1.6 million gain credit for other exemptions. Bill Gates has been buying farm land and claims the depreciation of the land value. Land does not actually depreciate, but you can claim it does because people like him get to fix the tax code (Donald Trump gets the same deduction, BTW on his gold courses). Less rich folks can still deduct the high cost of country club membership, of travel, entertainment, and meetings in exotic places (you can claim some of that too). Because so much of what you pay is Social security, it will come out that, while the executive may pay more in absolute tax, he or she will pay far less as a percentage. Many rich folks claim to find this offensive, but neglect to suggest the most obvious correction raise the ceiling on social security and (ideally) lower the the %.

I strongly suspect that we could bill for social security at 5% and 10% if we raised the ceiling to $2,000,000 per year. I suspect that SS would then be more solvent too. The net result would be drastically fairer.

Robert E. Buxbaum, April 23, 2023