Our Social Security

[Pale Rider]

Your Social Security



Franklin Roosevelt, a Democrat, introduced the Social Security (FICA) Program. He promised:

1.) That participation in the Program would be Completely voluntary,

2.) That the participants would only have to pay 1% of the first $1,400 of their annual Incomes into the Program,

3.) That the money the participants elected to put into the Program would be deductible from their income for tax purposes each year,

4.) That the money the participants put into the independent "Trust Fund" rather than into the general operating fund, and therefore, would only be used to fund the Social Security Retirement Program, and no other Government program, and,

5.) That the annuity payments to the retirees would never be taxed as income.

Since many of us have paid into FICA for years and are now receiving a Social Security check every month -- and then finding that we are getting taxed on 85% of the money we paid to the Federal government to "put away" -- you may be interested in the following:

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Q: Which Political Party took Social Security from the independent "Trust Fund" and put it into the general fund so that Congress could spend it?

A: It was Lyndon Johnson and the democratically controlled House and Senate.

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Q: Which Political Party eliminated the income tax deduction for Social Security (FICA) withholding?

A: The Democratic Party.

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Q: Which Political Party started taxing Social Security annuities?

A: The Democratic Party! , Al Gore casting the "tie-breaking" deciding vote is President of the Senate, while he was Vice President of the US

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Q: Which Political Party decided to start giving annuity payments to immigrants?

AND MY FAVORITE:

A: That's right! Jimmy Carter and the Democratic Party. Immigrants moved into this country, and at age 65, began to receive Social Security payments! The Democratic Party gave these payments to them, even though they never paid a dime into it!

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Then, after violating the original contract (FICA), the Democrats turn around and tell you that the Republicans want to take your Social Security away!

[theHawk]

Democrats are going to drive this country into complete bankruptcy.

[Pale Rider]

Democrats are going to drive this country into complete bankruptcy.

Well get ready, because I think the White House is all hillary's.

[JackDaniels]

Democrats are going to drive this country into complete bankruptcy.

Both parties are now so addicted to spending it's disgusting.

[Joe Steel]

Your Social Security

Franklin Roosevelt, a Democrat, introduced the Social Security (FICA) Program. He promised:

1.) That participation in the Program would be Completely voluntary,

2.) That the participants would only have to pay 1% of the first $1,400 of their annual Incomes into the Program,

3.) That the money the participants elected to put into the Program would be deductible from their income for tax purposes each year,

4.) That the money the participants put into the independent "Trust Fund" rather than into the general operating fund, and therefore, would only be used to fund the Social Security Retirement Program, and no other Government program, and,

5.) That the annuity payments to the retirees would never be taxed as income.

...

Then, after violating the original contract (FICA), the Democrats turn around and tell you that the Republicans want to take your Social Security away!

CORRECTING THE MYTHS AND MISSTATEMENTS

Myth 1: President Roosevelt promised that participation in the program would be completely voluntary

Persons working in employment covered by Social Security are subject to the FICA payroll tax. Like all taxes, this has never been voluntary. From the first days of the program to the present, anyone working on a job covered by Social Security has been obligated to pay their payroll taxes.

In the early years of the program, however, only about half the jobs in the economy were covered by Social Security. Thus one could work in non-covered employment and not have to pay FICA taxes (and of course, one would not be eligible to collect a future Social Security benefit). In that indirect sense, participation in Social Security was voluntary. However, if a job was covered, or became covered by subsequent law, then if a person worked at that job, participation in Social Security was mandatory.

There have only been a handful of exceptions to this rule, generally involving persons working for state/local governments. Under certain conditions, employees of state/local governments have been able to voluntarily choose to have their employment covered or not covered.


Myth 2: President Roosevelt promised that the participants would only have to pay 1% of the first $1,400 of their annual incomes into the program

The tax rate in the original 1935 law was 1% each on the employer and the employee, on the first $3,000 of earnings. This rate was increased on a regular schedule in four steps so that by 1949 the rate would be 3% each on the first $3,000. The figure was never $,1400, and the rate was never fixed for all time at 1%.

(The text of the 1935 law and the tax rate schedule can be found elsewhere on our website.)

Myth 3: President Roosevelt promised that the money the participants elected to put into the program would be deductible from their income for tax purposes each year

There was never any provision of law making the Social Security taxes paid by employees deductible for income tax purposes. In fact, the 1935 law expressly forbid this idea, in Section 803 of Title VIII.

(The text of Title VIII. can be found elsewhere on our website.)


Myth 4: President Roosevelt promised that the money the participants paid would be put into the independent "Trust Fund," rather than into the General operating fund, and therefore, would only be used to fund the Social Security Retirement program, and no other Government program

The idea here is basically correct. However, this statement is usually joined to a second statement to the effect that this principle was violated by subsequent Administrations. However, there has never been any change in the way the Social Security program is financed or the way that Social Security payroll taxes are used by the federal government.

The Social Security Trust Fund was created in 1939 as part of the Amendments enacted in that year. From its inception, the Trust Fund has always worked the same way. The Social Security Trust Fund has never been "put into the general fund of the government."

Most likely this myth comes from a confusion between the financing of the Social Security program and the way the Social Security Trust Fund is treated in federal budget accounting. Starting in 1969 (due to action by the Johnson Administration in 1968) the transactions to the Trust Fund were included in what is known as the "unified budget." This means that every function of the federal government is included in a single budget. This is sometimes described by saying that the Social Security Trust Funds are "on-budget." This budget treatment of the Social Security Trust Fund continued until 1990 when the Trust Funds were again taken "off-budget." This means only that they are shown as a separate account in the federal budget. But whether the Trust Funds are "on-budget" or "off-budget" is primarily a question of accounting practices--it has no affect on the actual operations of the Trust Fund itself.


Myth 5: President Roosevelt promised that the annuity payments to the retirees would never be taxed as income

Originally, Social Security benefits were not taxable income. This was not, however, a provision of the law, nor anything that President Roosevelt did or could have "promised." It was the result of a series of administrative rulings issued by the Treasury Department in the early years of the program. (The Treasury rulings can be found elsewhere on our website.)

In 1983 Congress changed the law by specifically authorizing the taxation of Social Security benefits. This was part of the 1983 Amendments, and this law overrode the earlier administrative rulings from the Treasury Department. (A detailed explanation of the 1983 Amendments can be found elsewhere on our website.)

MYTHS AND MISINFORMATION ABOUT SOCIAL SECURITY (http://www.ssa.gov/history/InternetMyths.html)

[red states rule]

Who the hell is going to pay for these entitlements? The tax increases needed will cripple the economy and break the backs of the workers


When Silence Isn't Golden

By Robert J. Samuelson
Newsweek
Aug. 6, 2007 issue - If you haven't noticed, the major presidential candidates—Republican and Democratic—are dodging one of the thorniest problems they'd face if elected: the huge budget costs of aging baby boomers. In last week's CNN/YouTube debate, New Mexico Gov. Bill Richardson cleverly deflected the issue. "The best solution," he said, "is a bipartisan effort to fix it." Brilliant. There's already a bipartisan consensus: do nothing. No one plugs cutting retirement benefits or raising taxes, the obvious choices.

End of story? Not exactly. There's also a less-noticed cause for the neglect. Washington's vaunted think tanks—citadels for public intellectuals both liberal and conservative—have tiptoed around the problem. Ideally, think tanks expand the public conversation by saying things too controversial for politicians to say on their own. Here, they've abdicated that role.

The aging of America is not just a population change or, as a budget problem, an accounting exercise. It involves a profound transformation of the nature of government: commitments to the older population are slowly overwhelming other public goals; the national government is becoming mainly an income-transfer mechanism from younger workers to older retirees.

Consider the outlook. From 2005 to 2030, the 65-and-over population will nearly double to 71 million; its share of the population will rise to 20 percent from 12 percent. Social Security, Medicare and Medicaid—programs that serve older people—already exceed 40 percent of the $2.7 trillion federal budget. By 2030, their share could hit 75 percent of the present budget, projects the Congressional Budget Office. The result: a political impasse.

The 2030 projections are daunting. To keep federal spending stable as a share of the economy would mean eliminating all defense spending and most other domestic programs (for research, homeland security, the environment, etc.). To balance the budget with existing programs at their present economic shares would require, depending on assumptions, tax increases of 30 percent to 50 percent—or budget deficits could quadruple. A final possibility: cut retirement benefits by increasing eligibility ages, being less generous to wealthier retirees or trimming all payments.

Little wonder politicians stay silent. But think tanks ought to be thrilled, because these changes pose basic questions about government. What should it do? For whom? Why? How big can it grow without weakening the economy? Does that matter? Is social justice more important than economic growth? Do gains in life expectancy and the well-being of the elderly justify significant changes in Social Security and Medicare?

http://www.newsweek.com/id/39155

[Pale Rider]

CORRECTING THE MYTHS AND MISSTATEMENTS
MYTHS AND MISINFORMATION ABOUT SOCIAL SECURITY (http://www.ssa.gov/history/InternetMyths.html)

Who else but Social Security spinning their own laws because the money is now all gone... what a surprise.

[red states rule]

Who else but Social Security spinning their own laws because the money is now all gone... what a surprise.

Hey PR, all is well. Obama has the answer.

A $1 trillion Social Security tax increase


http://www.boston.com/news/politics/politicalintelligence/2008/02/clinton_obama_s.html

[Pale Rider]

Hey PR, all is well. Obama has the answer.

A $1 trillion Social Security tax increase

http://www.boston.com/news/politics/politicalintelligence/2008/02/clinton_obama_s.html

Socialists. Plain and simple.

[red states rule]

Socialists. Plain and simple.

It gets worse PR. Here is a snip from a very long and detailed report on how these entitlements are going to destroy our economy


snip

Economic and Budgetary Unsustainability. The current system is economically unsustain*able. Spending for Social Security, Medicare, and Medicaid is projected to increase from 8.4 percent of GDP in 2005 to 18.9 percent of GDP in 2050. Lawmakers would have to raise taxes by an amount eventually nearing $11,000 per house*hold (adjusted into today’s economy) in order to pay for all projected spending. Over time, such tax increases would devastate the U.S. economy and substantially harm working families. Assum*ing that those tax increases do not occur, the net interest cost of current federal debt, combined with trillions of dollars of new debt, would push spending to unsustainable levels.

Those who consider these scenarios overly pes*simistic should examine the Western European economies that are already sinking under the weight of their enormous social insurance systems. With birth rates that are not even sufficient to replace their current population, many “old Europe” nations have been forced to impose steep tax increases on their remaining workers to fund these bloated benefit systems.

Overall, government spending in the 15 nations comprising the pre-2004 European Union (EU-15) averages 48 percent of GDP, and tax revenues aver*age 41 percent of GDP. (See Table 4.) These high tax rates and expenditures, combined with tight eco*nomic regulations, have hammered their econo*mies. Compared to the United States, per capita income is 30 percent lower in the EU-15, economic growth rates are 34 percent lower, unemployment is substantially higher, and living standards match only America’s poorest states.[23]

As their populations continue to age, the econo*mies of countries such as Germany and France risk collapsing under the weight of their unrealistically generous retirement and welfare systems. These European crises provide a glimpse into America’s future if government spending continues to increase steeply.

http://www.heritage.org/Research/Budget/bg1897.cfm

[PostmodernProphet]

suggestions for solving SS problems.....

eliminate all SS payments to persons earning more than $75k a year from other sources....

double SS payments to all persons earning nothing besides SS payments....

scale SS to all persons in between accordingly....

reason: why should the government subsidize retirement benefits to people who already earn $75k a year or more.....I would rather see some widow struggling to get by receive $22k a year in benefits instead of $11k and not send anything to someone who doesn't need it....

I haven't done the calculations recently, but about four years ago the money saved in payouts was sufficient to put SS in the black for at least 50 years......

[5stringJeff]

suggestions for solving SS problems.....

eliminate all SS payments to persons earning more than $75k a year from other sources....

OK... as long as those earning over $75K/year don't have to pay SS taxes.


double SS payments to all persons earning nothing besides SS payments....

scale SS to all persons in between accordingly....

OK... double taxation of the poor for SS, and adjust tax rates in between accordingly.


reason: why should the government subsidize retirement benefits to people who already earn $75k a year or more.....I would rather see some widow struggling to get by receive $22k a year in benefits instead of $11k and not send anything to someone who doesn't need it....

I haven't done the calculations recently, but about four years ago the money saved in payouts was sufficient to put SS in the black for at least 50 years......

I'd rather see SS privatized completely, and have people take responsibility for their own retirement.

[PostmodernProphet]

OK... as long as those earning over $75K/year don't have to pay SS taxes.

why?....do you get life insurance coverage from a private company now without paying premiums?......do you get insurance on your house without paying premiums?.....you have to pay premiums on this "insurance" that when you retire you will receive at least $22k in income a year.....

[PostmodernProphet]

double taxation of the poor for SS, and adjust tax rates in between accordingly

and how do you know that you won't become poor between now and age 67?.....maybe those funds you put into Enron and the dotcoms won't be there when you retire....so do you pay "double" taxation only when you know for sure you will become one of the poor, or right from the start.......

[5stringJeff]

why?....do you get life insurance coverage from a private company now without paying premiums?......do you get insurance on your house without paying premiums?.....you have to pay premiums on this "insurance" that when you retire you will receive at least $22k in income a year.....

You said you wanted to eliminate benefits for people earning more than $75K per year. If they get no benefits, why should they pay the SS tax?


and how do you know that you won't become poor between now and age 67?.....maybe those funds you put into Enron and the dotcoms won't be there when you retire....so do you pay "double" taxation only when you know for sure you will become one of the poor, or right from the start.......

If it's an insurance system, as you liken it to, then you should receive the premiums when you reach the retirement age, regardless of income.

My point in making my last post is that you can't arbitrarily say that someone is "too rich" to get SS benefits or "too poor" to receive what SS promises without some additional supplement. If you pay in, you should receive benefits in proportion with what you paid in.

[PostmodernProphet]

If it's an insurance system, as you liken it to, then you should receive the premiums when you reach the retirement age, regardless of income.

????....do you get all your car insurance premiums back if you don't have an accident?.....if so, please PM me the name of your carrier......


If you pay in, you should receive benefits in proportion with what you paid in.

really?.....why?.....we don't currently base our tax structure on benefits received, nor have I ever heard a proposal to do so......

[5stringJeff]

????....do you get all your car insurance premiums back if you don't have an accident?.....if so, please PM me the name of your carrier......



really?.....why?.....we don't currently base our tax structure on benefits received, nor have I ever heard a proposal to do so......

SS is based on age, not income. Therefore if you reach the retirement age, you get benefits. That's how the system is currently designed.

Again, I favor privatizing and/or scrapping the whole thing, but if you're going to keep SS, then the benefits ought to be available to all who pay in to the system.

[PostmodernProphet]

then the benefits ought to be available to all who pay in to the system

again why...simply because they paid for it?.....we have the same problem with the Medicaid drug benefit.....taxpayers subsidize premiums for people making up to $150k a year....why does someone earning that much need a subsidy on their insurance premiums paid by people who earn a third as much......


SS is based on age, not income. Therefore if you reach the retirement age, you get benefits. That's how the system is currently designed.


yes it is...that's what we ought to change....

[5stringJeff]

again why...simply because they paid for it?.....we have the same problem with the Medicaid drug benefit.....taxpayers subsidize premiums for people making up to $150k a year....why does someone earning that much need a subsidy on their insurance premiums paid by people who earn a third as much......



yes it is...that's what we ought to change....

Obviously, you want to change it into a wealth redistribution scheme, whereas I'd like to change it into a personal retirement account.

[PostmodernProphet]

lol, well....I guess if there was ever a wealth distribution scheme I was in favor of it would be one that benefited 80 year old widows trying to live on nothing but social security.....

the wealth distribution scheme that I think sucks is the one that charges me 1.2% of my earnings to pay medicare benefits insurance premiums for Ross Perot.......

[red states rule]

suggestions for solving SS problems.....

eliminate all SS payments to persons earning more than $75k a year from other sources....

double SS payments to all persons earning nothing besides SS payments....

scale SS to all persons in between accordingly....

reason: why should the government subsidize retirement benefits to people who already earn $75k a year or more.....I would rather see some widow struggling to get by receive $22k a year in benefits instead of $11k and not send anything to someone who doesn't need it....

I haven't done the calculations recently, but about four years ago the money saved in payouts was sufficient to put SS in the black for at least 50 years......


So you want to turn SS into a welfare program?

[PostmodernProphet]

apart from the fact it currently sends $11k to a certain number of folks who have absolutely no need for it, it already is.......nobody pays more into the system than they take out of it except for people who die young.....

[Kathianne]

apart from the fact it currently sends $11k to a certain number of folks who have absolutely no need for it, it already is.......

I wouldn't mind seeing social security means tested, after the money put in by the individual was returned.The idea that government should be able to confiscate earned income, before taxes and keep it because one is successful is nothing less than theft.

Of course the individual could always say, "No, keep it, I don't need it back."

[PostmodernProphet]

The idea that government should be able to confiscate earned income, before taxes and keep it because one is successful is nothing less than theft.



nothing is certain in life but theft and taxes.......

[red states rule]

Here are the numbers - they are not pretty


snip

Comptroller General David Walker, who heads the Government Accountability Office, testified Jan. 29 before the Senate Budget Committee. His subject was the unfunded liabilities Uncle Sam has incurred on our behalf through already promised entitlements in programs such as Social Security, Medicare and the veterans benefits. These liabilities now exceed by $53 trillion the tax revenues projected to be available to pay for them.

"I know it is hard to make sense of what 'trillions' means," Mr. Walker said. "One way to think about it is this: Imagine we decided to put aside and invest today enough to cover these promises tomorrow. It would take about $455,000 per American household — or $175,000 for every man, woman and child in the United States."

Of course, every man, woman and child does not work for pay outside the home. Some are too young. Some take care of their own children. Some are criminals who have actually been locked up in jail. Some are ill or incapacitated. And some are just lazy.

When you divide the unfunded costs of promised entitlement benefits by the number of Americans who work full time, says Mr. Walker, it equals $410,000 per worker.

http://www.washingtontimes.com/article/20080208/COMMENTARY/643371845/1012