Social Security mildly redistributes wealth from higher-income to lower-income people.

Question

Quizplus · Accepted Answer

Social Security is funded through payroll taxes, which are based on a percentage of a worker's income up to a certain amount. This means that higher-income people pay more into the system, but their benefits are capped at a certain amount. Lower-income people, who may have paid a smaller amount in payroll taxes, often receive more in benefits relative to their income. Therefore, Social Security can be viewed as a form of redistributing wealth from higher-income to lower-income people.

Social Security Mildly Redistributes Wealth from Higher-Income to Lower-Income People