| Is Social Security Progressive?
Congressional Budget Office, December 15, 2006, online edition, 8p
"Social Security is the nation’s largest domestic program. It provides income support to 49 million beneficiaries, including retired workers, disabled workers, and their dependents and survivors. Benefit payments currently account for more than a fifth of federal outlays, and the payroll taxes that finance the program account for more than a quarter of federal revenues. Social Security can have a significant effect on the economic well-being of workers and their families... Because the Social Security system involves both taxes and benefits, measures of its progressivity must incorporate information about both. To do so, analysts commonly focus on various measures of “money’s worth,” or the net benefit, positive or negative, that participants receive from the system. One measure of money’s worth is the ratio of lifetime Social Security benefits that an individual receives to his or her lifetime Social Security taxes paid. If that benefit-to-tax ratio is higher for lowerearning individuals, then the system is considered progressive."
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