A World of Wealth: How Capitalism Turns Profits into Progress

Chapter 9. The Capitalist Approach to Retirement Security: It’s an Individual’s Duty First

U.S. Social Security was sold to the American public during the New Deal of the 1930s as a sort of annuity, like a private insurance scheme in which all participants pay, by taxes, in advance of the benefits they receive. To appeal to the human desire to get something for nothing, the obligation to pay the Social Security tax is split evenly between workers and their employers. Employers receive no benefit from paying the tax; however, they could have paid the money to the workers as salary. The government, by investing tax receipts in government bonds, makes the payments without burdening other taxpayers. In theory, participants get what they and their ...