Forum Post: Why is there a special tax (Social Security) just because you have to WORK for a living?
Posted 13 years ago on Oct. 11, 2011, 11:34 p.m. EST by brokennb
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If a person has to actually WORK for a living, they pay a tax that does NOT APPLY to people who don't. Social Security, Self Employment, OASDI, whatever you want to call it is a tax of about 15% on the WORKING CLASS ONLY.
If you make your money off Interest, Dividends, Capital Gains, you WILL NOT have to pay this tax, which is IN ADDITION TO the federal income tax.
It's like this, the working man could pay a tax rate twice that of a person who makes all their money from long term capital gains (limited to 15%).
Generally because if you make your money off dividends, interest, and capital gains; you will continue to do so after you've reached retirement age and would no longer be able to physically work. However, if you have to work for a living you will need some way to sustain yourself after you can no longer work. Hence why wages are taxed for social security and other incomes are not. The people who will actually be using it, are paying for it.