I know that my remarks on Social Security will be frightening to some, rejected by some, and definitely go against what everybody has heard and commonly believes, but there needs to be some clarification on this tax.
The common belief is that the Social Security funds are actually the money of the recipients who, for years have had their paychecks deducted for Social Security through this TAX. Employees are TAXED at 7.5% and their employers pay an additional TAX at 7.5% for each employee and this has been stated as a match. The self employed individual actually is TAXED for Social Security at 15%; that is they pay for themselves as the employee and the employer. But since it is a TAX, it is NOT your money. There is no ownership on the part of the recipients in Social Security. Of course I believe that it starts as your money, but once taxed, ownership is transferred. Simply put, it is no longer your money!
Yes, they have your name, your number and your address, for billing purposes. Those who receive a social security benefit receive a check regularly. But this is at the WILL of Congress, and Congress can change who receives, when they receive, and how they receive this benefit. Congress can increase or decrease this benefit. Congress can, and does, give this benefit to individuals who have never paid/contributed the social security tax.
Remember that Congress has the power to levy taxes, and taxes are never the ‘peoples’ money. Even though Al Gore wanted to put the Social Security ‘trust fund’ in a lock box to preserve it; his was political bluster. There is no money in Social Security as I write, and when Al Gore wanted to lock up this empty box, Congress had already raided the fund, replacing what they have taken with IOU’s. What is the National Debt now--$16 Trillion dollars? That is where the true accounting for Social Security resides.
It seems that politicians have their heads in the sand or somewhere else, and continue the prevarication of ‘your money’ while wringing their hands, as they run for re-election, or never bring up the insolvency topic at all. Our public is too naive to think otherwise, and your elected representatives, who will receive a federal retirement plan and not Social Security, do not want to upset their paycheck, and are thus willing to go along with common beliefs even if they are erroneous. Politically, it would be devastating to Democrats and Republicans alike to destroy this bit of socialism and fiat philanthropy in the country.
In 1935 when President Franklin D. Roosevelt inked his signature to the Social Security Act, the tax began. This tax law (1935) states “Every qualified individual (as defined in section 210) shall be entitled to receive, with respect to the period beginning on the date he attains the age of sixty-five, or on January 1, 1942, whichever is the later, and ending on the date of his death, an old-age benefit (payable as nearly as practicable in equal monthly installments)…”
Let’s look at this, the first payout began in 1942, seven years after the tax was signed into law and there were 40 workers paying the tax for every person receiving the benefit of Social Security that had reached their 65 birthday. Back then, the average life span of a Caucasian male was 59 years, and the average life span of a Black male was 54 years. From an actuarial point of view, and Mr. Roosevelt (D) and Congress were aware of this, the average male, Caucasian or Black, never reached their 65th birthday. So in establishing Social Security, the numbers indicated that one-half of the contributors would never receive the benefit, and the President and Congress new this to be the case.
What they did not count on were the advancements in Medicine and the food supply that has increased the average life span well past 65 years, and today it is reported that there are 4 workers for each Social Security recipient. Of course that is adjusted by Obama care because this legislation cuts Medicare $716 billion dollars, provides for 16,000 new IRS agents, and provides for zero new doctors.
Congress will continue to juggle Social Security but there is not one politician who is willing to risk the political blowback or their political office to have the people fully educated. Obama and Biden say that there is nothing wrong with Social Security funds because from their Socialist/Marxist (Democrat) viewpoint they will continue to borrow the money from the Chinese, increasing the national debt and leave the bill to your great grandchildren to pay.
Governor Romney and Congressman Ryan at least recognize that there needs to be some adjustments in the national spending so that Social Security will be there for those currently on it; provide a better future for those yet to reach retirement; and lower the debt for our children.
Imagine the irresponsibility of those who have saddled this nation with a $16 Trillion dollar debt, and still want to add more to it.
May God bring sense to this nation!
Richard D. Skidmore is a professor at Pierce College in Woodland Hills, CA where he trains students for the job market and educators about the technical changes in the workplace. A graduate of California Polytechnic State University, Skidmore has authored several articles relating to business, accounting, mathematics and computer technology as it relates to business. He was director of the Job Placement Center for LA Pierce College and has coordinated cooperative work experience education.