Question

The funds to finance Social Security benefits come from:

A) Voluntary contributions from the government, the employer, and the self-employed.
B) Compulsory contributions from the employee, the employer, and the self-employed.
C) The state and income tax.
D) Charitable contributions from the federal government
E) Federal income tax

Answer 1

The funds to finance Social Security benefits come from compulsory contributions made by both employees and employers through payroll taxes. Workers contribute 6.2% of their wages, while employers contribute an equal share. These funds are used to provide Social Security benefits to retired workers, as well as disability and survivor benefits.

Step-by-step explanation:

The funds to finance Social Security benefits come from compulsory contributions from the employee, the employer, and the self-employed. Workers contribute 6.2% of their wages, and employers also contribute an equal share of 6.2%. These contributions are made through payroll taxes, which are deducted directly from workers' paychecks. The wages that are subject to taxation are capped at a certain limit each year. This revenue is used to fund Social Security benefits for retired workers, as well as disability and survivor benefits.