DEVELOPMENT PLAN #81 — A Purse for Welfare: A Social Security Tax on Wages
Contributed by: Takeshi Miyaoka on Wednesday, November 04 2026
Last modified on Wednesday, November 04 2026
This is a development plan article about something we would like to build next. Nothing described here is implemented yet; the ideas are still under consideration and may change before they are built.
Today's work made countries without any researched welfare program have no welfare budget, and added donut charts that break down national revenue and spending. Now that welfare can be funded, the next question is where that money comes from. Tonight we look at the Social Security Tax — already in the research list but not yet doing anything — and how it could become a separate purse for welfare benefits. The idea has been added to improvement item TAX-012.
Where things stand: researchable, but not a tax yetThe welfare branch of research includes "Social Security Tax", which can be researched in 60 days after Income Tax and Unemployment Benefits. However, the tax specification treats it as "not yet supported", and the Tax Policy screen does not show it even when researched. The tax rates list holds eight taxes: poll, income, corporate, property, inheritance, gift, consumption and tariff. 
Image 1: the Tax Policy screen in a development debug build, with every tax researched for verification (development version of October 31). There is no Social Security Tax row.
Meanwhile, welfare benefits (medical, elder care, disability, child, public assistance and employment support) are paid from the treasury within a welfare budget set as revenue × welfare budget rate (#66).
What we want to make more interestingRight now, the only ways to pay for more welfare are to cut other budgets or raise taxes for the whole treasury. And the time benefits are needed most — when unemployment rises — is usually when tax revenue falls too. The game lacks the feel of social security: save up in good times, pay out in hard times. If the Social Security Tax becomes a purse that fills only for welfare, it opens new decisions: how high to set the rate, and when to draw on it.
Idea 1: two rates on wagesFor a country that has finished the research, we would like to add a "Social Security Tax" row to the direct taxes on the Tax Policy screen. Unlike other taxes, it has two rates.
- Worker share: withheld from wages when they are paid.
- Employer share: paid by the employer from its business account on the same wages.
- What is taxed: only wages actually paid to households, not dividends. Both rates start at 0% and take effect at the next 0:00, like other taxes.
The revenue donut would show it in its own colour as "Social security (to fund)", alongside how much each share brings in. The cost would be visible on the same screen: the employer share lowers facility profit as a labour cost, and the worker share lowers living standards through disposable income. 
Concept mock-up (under consideration). Numbers are examples, not values from the game.
Idea 2: a purse for welfare, the Social Security FundThe tax revenue would go into a Social Security Fund kept apart from the general treasury. The six programs would pay benefits from the fund first, and only the remainder from the welfare budget (the treasury) as today. Benefits paid from the fund do not use up the welfare budget.
At the top of the Welfare Programs page, we would like to show the fund balance as "days of benefits". For example, a balance of 1,128 ARC with benefits of 6.1 ARC a day is 185 days. In a month of rising unemployment the balance falls, and it builds up again as things recover. When it drops below 30 days, the page warns you. 
Concept mock-up (under consideration). The line and numbers are examples.
How we would build it, and how it connectsThe planned order is: (1) showing the tax after research and scheduling its rates, (2) recording the worker and employer shares as one transaction when wages are paid, (3) saving the fund and drawing on it for benefits, and (4) the Tax Policy and Welfare displays in Japanese and English. Tests would confirm that recalculating the same day never adds to the fund twice, and that total tax revenue matches what the fund received.
Paying benefits from the fund first changes the current welfare specification (benefits are paid from the treasury), so the specification would be revised when this is adopted. The weight of the tax also feeds back into hiring, private expansion (#72) and the minister's budget proposals (#71), so we want a balance where too high a rate cools the economy.
Tell us what you thinkIs it more interesting to split the burden between workers and employers, or is a single rate enough? And when the fund has money to spare, should it be usable for other areas, or reserved for welfare only? We would love to hear your thoughts.
Image 1 was captured from a development debug build using our verification procedure; images 2 and 3 are concept mock-ups (under consideration). Numbers are examples, not values from the game.
This morning's article: DEVELOPMENT SNAPSHOT #80 — Leave It to the Minister: Domestic Proposals That Carry Themselves Out
The welfare budget and six programs: DEVELOPMENT SNAPSHOT #66 — Sharing a Welfare Budget Across Six Programs: Employment Support and Elder Care
Previous plan: DEVELOPMENT PLAN #79 — Warning Before It Runs Short: A Supply Outlook