Social Security and Medicare Practice Exam 2026 - Free Practice Questions and Study Guide

The correct answer highlights that workers contribute to the Social Security system through payroll taxes, which are a significant source of funding for the benefits program. These taxes are deducted directly from employees' paychecks and matched by employers, ensuring a steady influx of revenue to support Social Security benefits for retirees, disabled individuals, and survivors of deceased workers. Understanding this structure is crucial because it clarifies how the system operates and the shared responsibility between workers and employers in funding Social Security.

This option underscores the importance of the contributions made by both employees and employers, which directly ties into the solvency and sustainability of the Social Security program. Without these contributions, the benefits promised to current and future beneficiaries would be at risk.

The other options present scenarios that do not accurately reflect the workings of the Social Security system. For example, suggesting that taxpayers receive rebates for their contributions misconstrues the system's intent, as Social Security benefits are not rebates but rather entitlements based on lifetime earnings and contributions. The idea that taxpayers are exempt from paying any taxes contradicts the required payroll tax contributions that finance the system. Similarly, insinuating that only employers contribute overlooks the fact that both workers and employers are integral to funding Social Security, which is essential for its functioning.