A flat payroll tax, matched by employers, funds Social Security and Medicare. Those taxes add to the cost of labor, and thus to the costs of goods and services produced in the United States. In a globalized world that puts US workers at a relative disadvantage.
The tax for Social Security is regressive, taxing the first $~100K of salary but not above. The Medicare tax is a flat tax on all wages, not as regressive as the Social Security tax, but...
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