Uhh, in what way is mandatory payments to the government not a tax? If your unlikely to live to retirement age your still stuck making SS payments. The cap is also 137,700$ so it depends on how close you are to retirement age and if your making catch-up payments.
Also, medicare doesn’t have a cap and is also ignores your 401k.
Let's modify the law slightly: you are now required to invest at minimum 6% of your income into a 401k or Roth IRA. This 6% is, invested in goverent bonds. Caps are increased to compensate. Social security is removed.
Is this a tax? Is it materially different from the universe today?
Social security is an investment, you should consider it as such when budgeting for retirement.
Yes. If I put 12.4% of my income in a 401K (the employer’s half is part of your compensation) and I drop dead before I can use it, my heirs get to keep the money.
A retired couple on SS simply gets their benefits cut if one of them dies. The ‘death benefit’ is a token 250$. In many cases the survivor gets exactly half as much money as the couple would have.
The spouse of a young worker can also receive benefits assuming they have children. But, that’s very much a social program effectively independent of how much money the worker had paid into SS though not their income.
Your spouse can collect either your social security or their own if they don’t get remarried. Your minor children can collect your SS until they are grown. It’s nowhere near what you can do with your own 401K.
From the government’s perspective they would suddenly need to pay for many programs like:
Supplemental Security Income (SSI).
The SSI program pays benefits based on financial need and is intended for low income individuals and families.
If SS taxes where not paying for that money then it would need to come from the general fund. Similarly, with SS doubling your income from 50k to 100k doesn’t double they payout at retirement age. Instead, money is being shifted to support the less fortunate. Further, a married couple with one worker get’s a 50% larger payment than if that same worker never married.
In the end social security doesn’t act like a self funded retirement program.
Also, medicare doesn’t have a cap and is also ignores your 401k.