Ray Madoff

And in 1916, it was an additional estate tax.

This is a tax...

With massive industrialization, people didn't live near their families anymore.

So they couldn't rely on the kids will take in the parents or whatever.

Right.

And so he created this system of Social Security benefits and unemployment benefits, old age benefits and unemployment benefits.

He wanted it to look not like taxes, but they are very much taxes.

It is money that is taken out of current workers to pay the retirement benefits of current retirees.

There's a lot of ways that it's hidden from the public, right?

It's called FICA.

They use words like contributions, making you think like you're doing it voluntarily.

Very odd, you know, but it's intentionally done that way to make it

politically strong because people do feel that they've paid into the system, they've somehow earned it.

On the other hand, by not calling it taxes, by not calling it what it was, they made it easier for these taxes to increase and increase and payroll taxes have like more than doubled over that time.

So they're much higher than people see, and they are really quite burdensome, particularly for Avery and other self-employed workers who have to pay the full 15.3% themselves.

I mean, I'm a freelancer, so I watch it go.

I see it.

But even when the employers pay the half of it, which they do for people who have jobs, economists believe that that is actually money that would otherwise go in the form of higher salaries to people.

You might remember Mitt Romney and the 47% of takers, not makers, right?

He said they don't pay income taxes.