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Complaints about the unfairness of the social security pension system have become common. There are many variations on this theme, but the core of the unfairness claim is the failure of social security pensions to replicate the payment and benefit distribution structure of an "actuarially fair" insurance scheme. Middle- and high-income individuals would do better in such a private system. In this Article, I will argue that there is, indeed, unfairness in the social security tax and payments scheme, but that it is very nearly the opposite of the problem identified by private insurance advocates. Viewed from the perspective of overall retirement security, particularly when one considers how income tax expenditures (the revenue losses attributable to special federal income tax provisions) now shape that policy, the real fairness problems with social security are the regressivity of its tax structure and its modest capacity to maintain the standard of living of low and moderate wage earners. Moreover, an integrated view of both social security and income tax expenditures for employer-provided pensions and individual retirement savings reveals serious problems of relying on these generally applauded tax expenditures to implement national retirement security policies. At the same time, these tax expenditure provisions may place important tax policy concerns at risk.
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