When comparing the taxes that people pay into Social Security versus the benefits they receive from the program, is Social Security generally a better deal for low-income or high-income workers?
Per the U.S. Treasury Department, "Social Security benefits are generally redistributed intentionally toward lower-wage workers (i.e., benefits are progressive)." For example, a person who works for 44 years and earns $20,000/year will receive annual Social Security benefits equal to 11.3% of his lifetime payroll taxes. In contrast, a person who earns $80,000/year will receive only 6.5%. Due to the shorter life expectancy of low-income people, the average $20,000/year worker receives fewer years of benefits, but his lifetime benefit-to-tax ratio is still about 1.4 times larger than the $80,000/year worker. Also, low-income workers are eligible for the earned income tax credit, which "offsets much of the impact of Social Security taxes paid by low-income workers."