Here is a good little piece of information to show how the tax burder has shifted in America. Last year social security taxes as a percentage of total government revenue broke as new all time high, weighing in at 40%, compared to the previous high set in 1992 of 37.9% (graph since 1962 inside).
From 1976 to 1981, the ratio was stable around 30%: In 1976 $90.8 billion was collected out of $298.1 billion (30.5%), and in 1981 it was $182.7 billion out of $599.3 billion (also 30.5%). This was from inflation pusing people into higher income tax brackets, known as bracket creep, without any gain in real wealth. This increased income tax collections at a faster rate than the flat to slightly recessive payroll tax. However, this wasn't sustainable. It was an inflation bubble that needed to be popped before it drove the country into the ground.
As income taxes were brought down over the the 1980s during the Reagan administration, payroll taxes didn't have the same reductions. Why? Well, you can't. Inflation increased cost of living adjustments while making the dollars in the trust fund worth less. The only way to keep the system solvent was to increase the amount collected into the "pay as you go" system where each current generation pays the liability of the previous generation. The percentage of revenue from social security taxes would grow until 1986 flattening out a little at 39.6%. From there it would bounce around and slowly climb to the old 1992 high. However, during the 1990s as the economy took off roaring and income tax inflows were staggering, the percent from social security crashed back down to 32.2% in 2000.
However, I just committed the same error that many reports do. I didn't include the Earned Income Tax Credit (EITC). The EITC was created as a way to refund part of the payroll tax through a refundable income tax credit. Since its inception the EITC has become the fastest growing anti-poverty program, now only second in size to Medicaid. Any refunds from this credit should actually be deducted from payroll tax collections to find a truer measure of how much the working poor have been affected. Unfortunately, the ETIC is incredibly complex and opaque, and I cannot find numbers on how much of the EITC paid back (I can only find its total costs).
Social security tax collections as a percentage of total revenue
