Not only did inflation soar, but incomes - the basis of payroll contributions - stagnated.

These options would be much preferable to altering payroll contributions to Social Security.

A few days ago, Mr. Polese bought into the argument, shifting 10 percent of his payroll contributions to an international stock fund.

Non-financial companies saw an increase in operating profits of 0.8pc but these were negated by higher taxes and payroll contribution, the statistics office said.

Another common one is the 401(k) plan, a reference to the provision in the tax code that makes payroll contributions and their earned interest deductible.

Funded by payroll contributions from workers, Medicare removed the worry for people over sixty-five by making them eligible for physician and hospital services.

Consider in Figure 6.4 the situation where all of the social security benefits are financed by payroll contributions by the employee.

But some in Congress want to break the cross-subsidies, tying retirement benefits much more closely to a worker's payroll contributions.

Analysts say the looming shortfalls for Social Security, big as they are, can be filled with comparatively modest adjustments to payroll contributions or future benefits.

Yet for the higher earner, the 150 percent payoff may make the payroll contributions seem like a wage subsidy.