Originally Posted by samclem
If social security is viewed as a social welfare program, I'm not seeing why it is inconsistent that those with higher incomes should take home less of it (via a higher effective taxation of the SS benefits--both through a higher %age being subject to taxation and the higher marginal rates that higher income brings).
But that's not how it was "sold". Let's forget for a minute that it's a giant Ponzi scheme and that at the outset citizens were promised that SS numbers would never become a national ID number. It was sold as "insurance" (if you remember when the description on your paycheck was "FICA", that stood for "Federal Insurance
Contributions Act"). Now they give you a "benefit" with one hand and take part of it away with the other. DH and I have paid plenty on his SS because up to 2 days ago I was gainfully employed.
And yes, I suspect the "back door" taxation will expand. I haven't looked into it but I'm guessing that any use of Healthcare Spending Account funds for medical or dental expenses, for example, will end up in our Adjusted Gross and thus affect SS. Maybe the same for Roth withdrawals?