Social Security’s Treatment of Postwar Generations

Social Security’s long-term funding gap is wider than what is officially reported or commonly perceived. Furthermore, the program’s tax treatment of distinct groups varies considerably among postwar generations: Women, whites, and the college educated have lower lifetime net tax rates than do men, non-whites, and those without a college education. Among income groups, the middle class faces the highest lifetime net tax rate. Social Security also provides much lower, riskier rates of return on past contributions than alternative investment opportunities could yield.