> > I never checked this out myself, but someone (reliable) told me that
>> during the initial Congressional debate over SS it was made very
>> explicit that the system should be funded by taxes on labor, not
>> capital - thus the salary cap and the exemptions of nonwage income.
>>
>
>Do you know what the rationale behind that was?
That the capitalists who employ labour should directly meet the full cost of employing labour (including the cost of social security.)
Unemployment benefits are a part of the socially necessary cost of labour, if the cost is met solely from income taxes paid by employers, as in the US system, then the cost of labour is more transparent than in systems where unemployment benefits are met from general revenue.
Bill Bartlett Bracknell Tas