Social Security fairness, Digi Mart USA News: On January 31, 1940, retired legal secretary Ida May Fuller of Ludlow, Vermont, received the first monthly Social Security check, for $22.54. She had paid $24.75 in payroll taxes over about three years of covered work. Fuller lived to 100 and collected $22,888.92 before she died in 1975, roughly 925 times her contributions, according to the Social Security Administration’s historian.
The program, the author argues, has been an intergenerational transfer from the start. Social Security paid its first retirees for benefits they had barely financed and sent the bill to people not yet born.
Eighty-six years later, the program is insolvent, the author writes, and has accrued unfairness in many more ways.
A young worker pays 12.4 percent of wages to Social Security, or 10.6 percent for the retirement program alone. Half comes out of the paycheck, and the employer’s half shows up as lower wages.
Within weeks, the money goes out to current retirees.
Benefits now go to the richest age group. In the Federal Reserve’s 2025 Survey of Consumer Finances, households headed by someone 75 or older had the highest median net worth of any age group.
The author notes that not every senior is rich, but as a group, they are far better off than the young workers paying their benefits.
The author credits the U.S. private sector and capital markets for dramatically driving down poverty rates among seniors and boosting Americans’ savings.
Congress raised benefits in election years and indexed new benefits to wages, so each group of retirees has started out ahead of the last. Higher life expectancy means retirements now last about nine years longer than in 1940, and because checks go to everyone regardless of need, they kept coming as seniors grew richer.
The Washington Post’s Editorial Board, using IRS data, found that 37 percent of Social Security benefits go to senior households with total annual incomes above $100,000. The Committee for a Responsible Federal Budget counts about 1 million beneficiaries collecting at least $50,000 a year. Brookings Institution researchers found that seniors in the top income fifth average close to $30,000 a year from Social Security, plus more than $185,000 from other sources.
The author argues it makes sense to question whether a universal, earnings-related benefit should keep going to a prosperous group, citing intergenerational unfairness. Options mentioned include means-testing the program beyond the existing income tax on benefits for higher-income retirees, or putting a hard cap on benefits.
The author says he is partial to a flat benefit, and argues that increasing the payroll tax rate paid by workers would double down on the unfairness.
The author acknowledges the complication: the reason rich seniors receive large benefits is that their tax bills were large. Citing a Tax Foundation paper by Alex Durante and Kyle Pomerleau, the piece says Social Security benefits are quite progressive.
CBO estimates cited there show households in the bottom fifth of lifetime income collect about two and a half times what they pay in taxes, while households in the top fifth get back roughly what they paid.
A December 2025 Urban Institute report by Eugene Steuerle and Karen Smith calculates figures for individuals. A single male with low earnings ($35,000 in 2025 dollars) retiring in 2025 can expect about $251,000 in lifetime benefits for $185,000 of lifetime retirement payroll taxes.
A single male with average earnings ($72,300 in 2025 dollars) can expect about $414,000 in lifetime benefits for $412,000 of lifetime retirement payroll taxes. A single male with maximum taxable earnings ($176,100 in 2025 dollars) can expect about $666,000 in lifetime benefits for $1,002,000 of lifetime retirement payroll taxes.
A single woman with the same earnings as a single man pays the same taxes and starts with the same monthly check, yet she collects about 92 cents per dollar of tax, compared with his 83 cents, because she can expect to live longer. The author notes that Urban Institute scholars assume rich and poor live equally long, which understates what high earners collect.
A 2014 study by Dana Goldman and Peter Orszag found men in the top quarter of lifetime earners gained four years of life expectancy at 65 over three decades, far more than men at the bottom. A Center for Growth and Opportunity study estimates the widening gap has erased about three-quarters of Social Security’s progressivity.
The Urban Institute study leaves taxation out of its calculations, and including it would widen the gap between lifetime tax paid and lifetime benefits. The author argues that cutting benefits for today’s affluent retirees would make the system less fair to them, and that raising taxes on higher-income workers, as Senator Sanders proposes, would also deepen unfairness for higher-income retirees.
The author outlines existing means-testing elements. The income tax on benefits applies to retirees with income above $25,000 (single) and $32,000 (married), with up to 50 percent, then up to 85 percent, of benefits becoming taxable at ordinary rates.
The thresholds have never been indexed, so the tax reaches further into the middle class each year. A built-in cap also limits benefits, since earnings above the taxable maximum are not taxed or credited.
The piece also argues Social Security is unfair to dual-income married couples relative to single-income couples. When a second spouse works, the household’s lifetime earnings and Social Security taxes rise by about 45 percent, yet lifetime benefits rise by only about 5 percent, according to Urban Institute 2025 estimates.
The deepest unfairness, the author writes, is that taxpayers have no accrued property right to their benefits, a principle rooted in the U.S. Supreme Court’s 1960 decision in Flemming v.
Nestor. Congress may cut benefits, tax them, or rewrite the formula, and taxpayers cannot do anything about it.
A taxpayer who pays payroll taxes for forty years and dies at 63 leaves her or his children nothing from those contributions, apart from any survivor benefits the law allows.
The author concludes that Social Security lifts seniors out of poverty but also creates many forms of unfairness, including redistribution within generations, lifetime returns favoring those who live longer, and intergenerational tension. Another round of payroll tax increases, the author writes, would deepen several of these structurally unfair features.
