How Your 2019 Taxes Will Be Spent

Retired Americans collect more in benefits than they paid in taxes during their working lives. A system that cannot be sustained unchanged.

Has America promised more than younger taxpayers care to deliver?

The 15.3 percent payroll tax, split evenly between the employer and employee, covers most of Social Security’s and a small portion of Medicare’s costs.

The typical couple retiring today will receive Social Security benefits 13 percent higher than their lifetime contributions, and Medicare benefits that are triple their lifetime contributions into the system, even after adjusting for inflation and net present values.

As 74 million retiring baby boomers are added to this fragile system, paying all promised benefits would eventually require raising the payroll tax to 33 percent, or imposing a 34 percent value-added tax (basically, a national sales tax).

Source: How Your 2019 Taxes Will Be Spent | Economics21


  1. Again, not at all complete, and, as a result, very misleading.

    However, many Americans are not part of a “typical couple”. More importantly, while a “typical couple” may receive benefits that exceed the dollars contributed, those numbers do not adjust for the time value of money. Similarly, I doubt the average American will receive three times the taxes she paid in hospital benefits. So, that is probably an apples to oranges comparison – it may include more than hospital benefits, and may ignore not only the general revenue taxes people paid throughout their lifetimes, but also, again, the time value of money.

    And, finally, when promising too much to Baby Boomers to buy their votes, the system will always be sustainable so long as Congress has the power to tax future generations.


    1. I paid $97,948 in Medicare tax including on the future value of a non-qualified pension. It doesn’t take that long to eat that up with a hospital stay or two.


      1. I paid as much or more over 50+ years of employment, still paying today. However, according to HHS, the average number of days in the hospital in the last three years of life is 23. But, again, averages are deceiving – the median is less than 10 days. And, once you adjust for the time value of money …


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