Social Security has been built over an array of broken promises and costly changes. The alterations are costly, not only for government, but also for the nation’s working people. The program’s initiator, President Franklin Delano Roosevelt, promised that it would be completely voluntary. Try to withdraw from it, and you’ll see the non-existing worth of that promise.
From a required payment of one percent of a participant’s first $1,400 of earnings when SS began in the 1930s, wage earners now see 7.56 percent of the first $90,000 extracted from their pay. And the employer has to match the amount taken from each worker — money that might otherwise be used to expand his business or given to employees. Many workers 50 years ago would see their paychecks grow every mid-summer when required payments into the program were met. That boost in take-home pay no longer exists. Formerly, payments to Social Security were deductible from taxable income. Like horse-drawn carriages, that practice too is gone.
All funds collected in the name of Social Security were supposed to be kept in a sacrosanct “trust fund” where they would be distributed only to legitimate SS beneficiaries. But there never has been a trust fund because the federal government spends Social Security funds at will. In the vaunted trust fund will be found only a stack of IOUs issued by the federal government. This practice existed from Social Security’s inception. In 1937, the Supreme Court decreed that funds collected in the name of the program were labeled taxes that “are not earmarked in any way.”
Retirees were promised that their Social Security benefits would never be classified as taxable income. That too was blown away and recipients must now add the bulk of their SS retirement income to their earnings and pay income tax on the total. So, people are taxed by Social Security while building their retirement fund, and when they actually retire, they get taxed again. What a great program!
During the Carter administration (1977-1980), the Social Security administration started giving benefits to immigrants, even those who never paid anything into the program. No wonder people come to the U.S. illegally.
From a required payment of one percent of a participant’s first $1,400 of earnings when SS began in the 1930s, wage earners now see 7.56 percent of the first $90,000 extracted from their pay. And the employer has to match the amount taken from each worker — money that might otherwise be used to expand his business or given to employees. Many workers 50 years ago would see their paychecks grow every mid-summer when required payments into the program were met. That boost in take-home pay no longer exists. Formerly, payments to Social Security were deductible from taxable income. Like horse-drawn carriages, that practice too is gone.
All funds collected in the name of Social Security were supposed to be kept in a sacrosanct “trust fund” where they would be distributed only to legitimate SS beneficiaries. But there never has been a trust fund because the federal government spends Social Security funds at will. In the vaunted trust fund will be found only a stack of IOUs issued by the federal government. This practice existed from Social Security’s inception. In 1937, the Supreme Court decreed that funds collected in the name of the program were labeled taxes that “are not earmarked in any way.”
Retirees were promised that their Social Security benefits would never be classified as taxable income. That too was blown away and recipients must now add the bulk of their SS retirement income to their earnings and pay income tax on the total. So, people are taxed by Social Security while building their retirement fund, and when they actually retire, they get taxed again. What a great program!
During the Carter administration (1977-1980), the Social Security administration started giving benefits to immigrants, even those who never paid anything into the program. No wonder people come to the U.S. illegally.
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