My prediction/hope is that the stereotype of millenials as relatively happy socialites will end up reversing, with them falling in with us burn-it-to-the-ground X'ers once they are old enough to realize how screwed they are.
Perhaps our poor situation is just so obvious that, instead of mostly complaining, we're mostly fully resigned or preoccupied with fixing things in our own way. We are more Hero generation than Nomad, after all (https://en.wikipedia.org/wiki/Strauss%E2%80%93Howe_generatio...).
There will have to be a number of cut-backs in retirement benefits for future retirees, including means-testing, removing the maximum wage for Social Security contributions, and higher Medicare premiums.
This sounds like a great idea to me. It's absurd that only the first $118,500 of earnings are subject to to social security tax, and it means that our tax structure is much less progressive than it appears at first glance (which is one reason certain people strenuously avoid talking about any taxes except Federal Income Taxes).
Ahh! So the question is, at what point will Millenials (myself included, at the older end of the spectrum at 32) say "f* it" when we're paying Europe-level taxes with third world country benefits
* Single-payer Medicare for retires, expensive private insurance for everyone else
* Social security essentially becomes a basic income for retirees, as its not an account that can be depleted but an entitlement until death, supported by younger workers with terrible job prospects and long hours at low pay
Maybe the problem is that no one saves enough anymore, but that's because no one makes enough to save because most new income/wealth is kept by the very top wealth bracket.
Subtract all of this from your income and look at most of Western Europe and you'll see we pay roughly the same overall.
I agree most people don't save enough. Part of it is people buy a lot of things they don't really need but "deserve" and the other is as you said.
Note that this graph doesn't include VAT which can be 15%+ in the EU.
[1]http://www.economist.com/blogs/graphicdetail/2012/10/focus-4
It also sounds like it doesn't count state and local income taxes, nor property taxes or any of the many other taxes we have the privilege of paying.
The conclusion may well be correct, but the data presented doesn't seem to be nearly complete enough to support it.
Employer contributions don't come out of your paycheck though; for the business, its a cost of doing business.
Other benefits (company car, apartment, fuel etc.) are subject to employee's income tax beyond a certain threshold.
Edit: Taking a step back, there is simply a fundamental difference between taxes and payments to social security / different insurances.
I think the "fundamental difference" is key. I don't ultimately see any real difference between taking 12.4% of my pay (under $118,500) for Social Security, and taking a variable percentage of my pay for government operations in general. It's money, based on a percentage of what I earn, that goes to the government, i.e. an income tax.
If you remove the cap on contribution and/or means test the receipt then that pretense is gone. Politically, it becomes explicitly a welfare system for people that did not save for retirement and penalizes those that do save. Once Social Security is perceived as "unearned" it becomes an acceptable target for reduction or elimination to the population at large.
Social Security is in fact a welfare tax and no one is entitled to receive it (see: https://en.wikipedia.org/wiki/Flemming_v._Nestor) but its political viability is dependent on the popular perception to the contrary.
Well, its a monotonically increasing function of your contributions, but its not proportional to them, because of the bend points.
> If you remove the cap on contribution and/or means test the receipt then that pretense is gone.
Means testing might arguably do that in theory (except that it empirically doesn't in practice, as SS is, in fact, already means-tested via the rules for taxability), but how does removing the contribution cap so long as further contributions above the old cap still contribute to the benefit calculation?
I've felt millenials are the generation that feels the most helpless. Gen-X felt like they were promised something awesome and then screwed out of it. Millenials feel like they've got no chance to compete, so they don't expect it.
Gen-X resented the fact that they had to try so hard to win the rat race. Millenials know they have no hope of winning or even finishing, so the best they can hope for is to make the race more tolerable.
It's why you see things about how Millenials are more interested in comfort and work-life balance than straight up salary. Unlike the boomers who expected to work for a while and then retire on a nice nest-egg, and the Gen-Xers who struggled to meet an ever elusive goal of retirement, millenials don't have any expectation of retirement through normal means. They figure they're working forever, so they might as well get comfortable.
I mean, years ago I talked to gen-x'ers and there was a lot of dissatisfaction and a feeling of a loss of control and opportunities, but a lot of people who gave up on their dreams and settled for a job that they hate with a pension.
But with millenials, they're happy if they can take their 6 figure student loans and find any job at all, and a pension is a bizarre concept from a foreign world. They can't really hope to retire in the traditional sense, it's more like playing the lottery. There are some enterprising people who might make start-ups to try to get rich, but it's either get-rich or get-by, there's no sort of middle-class accumulation of wealth and a nice retirement at 65 any more. It's win big and buy a jet or eat spaghetti at home and avoid debt.
So if you have two jobs to choose from, neither with a salary that makes an early retirement seem a reality, and one makes life a little bit more tolerable, your decision is between a life spent (at least partially) working a more tolerable job, or a life spent working a less tolerable job. So you opt for the job that pays a bit less but gives you more leeway for work-life balance. Boomers see that as an irresponsible happy-go-lucky delay of retirement, while millenials feel that that retirement idea is not really feasible, and if you're going to be working forever, you might as well enjoy it. Gen-X kind of got stuck in the middle where they end up trying to work really hard at something they hate for the chance to get that retirement but keep getting the rug pulled out.
It's kind of like 3 people doing the limbo. The boomer plays, kind of bends a bit at the knees, leans his head back and gets under the stick. The Gen-X plays and when he first sees the bar it's nice and high, but as he gets closer and starts to go under the bar it keeps kind of getting lowered, so he keeps bending and contorting and struggling to get under the bar eventually. It hurts, but they still have hope they can get under it. The millenial looks at the bar, sitting ankle high and says fuck it and just decides to make the best of it on this side of the bar.
Then the boomers hear about the x'ers struggle and say just bend your knees and lean your head back, it's not so hard, nobody had trouble with it in our day and we didn't even go to college. Then the boomers hear about the millenials not even bothering to try to get under the bar and say "they're just fooling around, they aren't thinking about their future, they're never going to get under that bar unless they stop fooling around and try."
But the fact that the bar has moved is so often ignored. We're just all asked to bend further, and then blamed for not doing the impossible. The biggest difference between millenials and x'ers is that he millenials ARE aware of it, and that's why they can seem to be happy-go-lucky and less serious.
It's easy to motivate you to work hard when you might feel like you can retire early and live in comfort. It's a lot harder to motivate you to sacrifice a lot to work hard when it feels like there will be no end to that work, ever.
X'ers just got screwed because they got caught in the transition between easy future and no future.