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>> That makes FICA an "after tax" contribution <<

In fact your FICA contribution is calculated BEFORE your tax-deferred (IRA/403/401) contributions are deducted... and your FICA contributions are still included in your total taxable income.

As to "employer paying half of the tax", that's not quite true. The self-employed pay it all (directly) and (believe it or not) your employer does calculate that cost into their decision on how much "salary" you're going to get. {In fact, we get an annual "compensation summary" where the employer contributions to health, retirement, FICA, insurance, etc... are tallied and included in our "total compensation value".) So we can debate on how much of the "1/2 of FICA" actually comes out of your possible salary, but the answer depends a lot on the elasticity of demand for your job category.

Last but - WAY - not least:

regarding SS contributions and payback:
>> It's more like a pyramid scam <<

Hell NO ! It is a pay-as-you-go insurance program that has been designed as a redistributive tax. Go ask the SS commisioner if it is a 'retirement account'... the answer is NO. Who told you it was ? Your payout benefit is indeed 'related' to your contributions, but there is NO one-to-one relationship between your tax dollar paid today and the dollars you'll get (AS IF) later. You can't follow your money through the chain, anymore than you can follow your contribution to the national defense, or the US Highway you cross on the way to work, or your FannieMae guarenteed mortgage. Sorry.

Somewher else we can debate whether or NOT it is a good idea to redesign SS to be more of an 'individual account' type system, but FOR SURE, it is NOT one now.

Cheers !
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