This thread is motivated by discussion of what taxes to include in an accounting of peoples' tax burden. The short background is that people on the left tend to want to include the payroll taxes and people on the right don't. The simplest/safest logic says that taxes are taxes and all should be included, but there are implications to that position that are never addressed. The purpose of this thread is to deal with those implications. First, some samples of recent conversations. The first two quotes go together, the last two are separate. Now first a quick admonishment: people make mistakes and are sometimes careless with their wording, but we've had this conversation enough for everyone by now to know what the others are talking about. So while WhoWee's post was missing a qualification ('federal income taxes', not just "taxes"), OmCheeto should have known what was meant. ParticleGrl made a similar error in the last quote which implies that the upper class don't pay much more in $$, when the reality is they pay vastly more in $$ and just not much more (or less, depending on how you slice the data) in %%. So please: don't nitpick when you know what the person means. And I'll be addressing some of the other comments below as well... Now, for the meat. First, let me summarize the taxes in question: Social Security: 6.25% up to $106k income, then nothing above that. (temporarily reduced for this year) (both the employee and employer pay equal taxes at this rate) Medicare: 1.45%, flat. (both the employee and employer pay equal taxes at this rate) Unemployment: Varies by state, but is typically flat, but with a cap. (paid by employer) Now, if bundled together (either with both portions or just the employee portions) and considered as a plain ordinary "tax", the "payroll tax" is regressive as the largest piece is capped at a certain income level. So as a fraction of their income, people with high incomes can potentially pay a significantly lower %% than people with low incomes. Easy, right? Well, not so fast: All three of these programs are insurance programs, designed to relieve the general public of the responsibility of paying for these things out of pocket. They are not part of the normal function of government and were added less than 100 years ago in a pretty major shift in what the government does. For social security and unemployment, benefits are directly tied to contributions (the more you pay in, the more you are eligible to get back) while Medicare has equal benefits for everyone, but contributions are still tied to income on a flat basis. Conservatives argue that: 1. These services displace services that in the past and in part today, citizens paid for on their own. That makes them different from, say, paying the President's salary and buying warships, which has always been a core function of government. 2. Because these are services previously and partly today financed privately, shifting them to government without changing the cost structure would be an enormous wealth redistribution. Medicare is already a redistribution, since the tax is flat in percentage and not fixed-fee like private insurance, while liberals call Social Security "regressive" because the rich don't pay above a certain $$ value of their income for it. Addressing a concern in a quote above, that's what I meant by saying the rich are largely ineligible for SS: contributions and benefits are both capped above $106K, so people who make above that are not taxed nor do they receive benefits for additional income. Ie, someone who makes $213K a year is taxed on and receives benefits on less than 50% of their income: so they are mostly ineligible for Social Security. 3. The implication of #2 is vast. Today, Social Security and Medicare are fiercely lobbied for and defended by older people. We'll likely see some fierce defense in this thread. The basic argument against massive restructuring (favored by many younger people) is 'I paid in, I should get that money out'. But oops, problem: that logic is only valid if you consider SS and unemployment as insurance/investment programs tied to what you paid in. So this is the key thesis: If you want SS and unemployment to be considered ordinary taxes, you must then also be willing to divorce the benefits from the pay-in. Logic demands that you can't have it both ways. But of course, that logic is not acceptable to many people on either side of the aisle and support for the programs would almost certainly collapse if that happened. So to say the thesis again from the other direction: If you want to consider SS and unemployment to be pay-out based on what you pay-in investment/insurance programs, you logically cannot consider them to be "regular" taxes. 4. Even setting all of the above aside still does not logically allow liberals to combine these taxes with other taxes. The response for a conservative is easy and based on contribution: if you want to consider pay-out based on pay-in for taxes, then fine: The President works for the top half and not the bottom half of the population. The Navy only protects the top half. Only the top half can be allowed to visit national parks. Drive on an interstate. View the Hubble Space Telescope website. Get a weather report. Etc. Etc. Etc. If you want to get paid back what you paid in, then those in the bottom half can have back what they paid in to Social Security, but they paid nothing for any of these other programs and shouldn't use them. Sound good or do you want to have someone else pay for your cake and eat it too?