Commentary: Social Security (FICA)
My Dad sent me the following in an e-mail. I haven't check any of the facts or figures, but if even half of it is true then it brings new perspective to the president's push to change 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:
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 theDemocratically-controlled House andSenate.
Q: Which Political Party eliminated the income tax deduction for Social Security (FICA) withholding?
A: The Democratic Party.
Q: Which Political Party started taxing Social Security annuities?
A: The Democratic Party, with Al Gore casting the "tie-breaking" deciding vote as President of the Senate, while he was Vice President of the U.S.
Q: Which Political Party decided to start givingannuity payments to immigrants?
A: That's right! Jimmy Carter and the Democratic Party. Immigrants moved into this country, and at age 65, began to receive SSI Social Security payments! The Democratic Party gave these payments to them, even though they never paid a dime into it!
Then, after doing all this lying and thieving and violation of the original contract (FICA), the Democrats turn around and tell you that the Republicans want to take your Social Security away! And the worst part about it is, uninformed citizens believe it!
If enough people receive this, maybe a seed of awareness will be planted and maybe good changes will evolve. Politics is supposed to be the second oldest profession. I have come to realize that it bears a very close resemblance to the first.
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:
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 theDemocratically-controlled House andSenate.
Q: Which Political Party eliminated the income tax deduction for Social Security (FICA) withholding?
A: The Democratic Party.
Q: Which Political Party started taxing Social Security annuities?
A: The Democratic Party, with Al Gore casting the "tie-breaking" deciding vote as President of the Senate, while he was Vice President of the U.S.
Q: Which Political Party decided to start givingannuity payments to immigrants?
A: That's right! Jimmy Carter and the Democratic Party. Immigrants moved into this country, and at age 65, began to receive SSI Social Security payments! The Democratic Party gave these payments to them, even though they never paid a dime into it!
Then, after doing all this lying and thieving and violation of the original contract (FICA), the Democrats turn around and tell you that the Republicans want to take your Social Security away! And the worst part about it is, uninformed citizens believe it!
If enough people receive this, maybe a seed of awareness will be planted and maybe good changes will evolve. Politics is supposed to be the second oldest profession. I have come to realize that it bears a very close resemblance to the first.
posted by L. E. Howard, Jr. | 8:23 AM
2 Comments:
If you took out the partisan politic speech and told the whole story (i.e. Which President signed the largest FICA tax increase in history? Reagan. He signed an increase of 100% on the self employed.) and how FICA taxes have been used to offset tax cuts at the upper brackets to turn this from a partisan issue to an American worker issue.
And don't forget, while the upper 50% of income earners pay about 93% of the income taxes they make only about 88% of the income. In the meantime, they pay only about 78% of the FICA taxes while still earning about 88% of the income. Since Income taxes make up about 47% of federal revenues and FICA makes up 43%, this makes FICA taxation a fairness issue as well.
I understand your confusion, and I'll try to clear things up using the most unbiased approach possible (I am, after all, an evil conservative).
- In 1935, Congress passed and President Franklin D. Roosevelt signed into law the "Social Security Act." This law created "a system of Federal old-age benefits" for workers and their families. In 1956, the law was amended to also provide disability benefits.
- Social Security taxes are subject to a wage threshold. Any income earned above the threshold is not taxed. In 2000, the threshold was $76,200.
- In 1951, the wage threshold was 129% of the national average wage. In 1998, the threshold was 237% of the national average wage.
- Factors that have contributed to the falling ratio of people paying taxes compared to people receiving benefits:
1) Increase in life expectancy without a comparable increase in the retirement age.
2) The higher birth rate of the baby boom generation compared to the birth rates of succeeding generations.
3) The increasing number of people receiving disability benefits.
- Benefits and taxes are annually indexed to compensate for inflation and wage growth. The retirement age is not indexed to compensate for increased life expectancy.
- The words 'savings' or 'save' do not appear in the Social Security Act of 1935. The word 'benefit' appears 25 times.
What does all this mean? I think the answer is clear. To be totally objective, one must first accept that Social Security was never intended to be a retirement program. It is a safety net. Therefore, a reasonable (and nonpartisan person) must conclude that comparing payroll taxes and FICA is like trying to compare the price of airline tickets. One pays more for a first class seat, but everyone must pay the same proportion in sales tax regardless of what fare one might pay -- the only guarantee is that everyone on the aircraft will arrive at the destination at the same time.
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