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→United States: payroll tax
Social Security was founded as a quick-fix solution to [[unemployment]] by paying off older workers to give up their jobs for younger workers. No net new jobs were created. Economists call this a zero-sum game, where net gains and losses are exactly balanced. The payment system mimicks the idea of insurance premiums with payments withheld from a workers paycheck. None of the premiums, however, have ever been invested in a so-called "Trust fund," and are actually diverted into a "[[pay as you go]]" (or "paygo") system destined for immediate aggregate [[consumption expenditure]]s. Hence many of the structural flaws date from the programs' origins.
Social Security was founded as a quick-fix solution to [[unemployment]] by paying off older workers to give up their jobs for younger workers. No net new jobs were created. Economists call this a zero-sum game, where net gains and losses are exactly balanced. The payment system mimicks the idea of insurance premiums with payments withheld from a workers paycheck. None of the premiums, however, have ever been invested in a so-called "Trust fund," and are actually diverted into a "[[pay as you go]]" (or "paygo") system destined for immediate aggregate [[consumption expenditure]]s. Hence many of the structural flaws date from the programs' origins.
Payments are based on a percentage of earnings of workers which become an obligation, or [[debt]], of the United States government.
Payments are based on a percentage of earnings of workers which become an obligation, or [[debt]], of the United States government. The current rates are 15.3% -- half provided by the worker and half paid by the employer, which ''includes'' Medicare. No deduction or personal exemption is allowed, which means the first dollar of earnings is taxed.
Over the years excess withholdings from workers paychecks, (known as F.I.C.A.), have been used to fund government paygo operations such as the [[Vietnam War]],<ref>"President Johnson issued a 'unified' federal budget for FY1969. This was done administratively (i.e., not as a result of
Over the years excess withholdings from workers paychecks, (known as F.I.C.A.), have been used to fund government paygo operations such as the [[Vietnam War]],<ref>"President Johnson issued a 'unified' federal budget for FY1969. This was done administratively (i.e., not as a result of