Now while we're struggling mightily over the degree to which SS (and Medicare) may be in financial straits, how about another aspect of the tax part (F.I.C.A.) which should be troubling to well meaning men and women. Namely,
1. F.I.C.A. is a "regressive" tax (takes a larger percentage from low-income people), and
2. The proportion of U.S.A. Corp's operations that are paid for by this regressive tax has been substantially increasing over time.
Now you don't have to take my word for it, I'll be your tour guide to the archive of the official government O.M.B. (Office of Management and Budget) web page where you can see for yourself.
Now I know that in attacking so-called "Social Security," I seem to be taking the punch bowl away from the party. It's just that -- and I'm not happy to be in this position -- I'm pretty sure Jim Jones supplied the Kool Aid. I see myself as someone who's saying, "No, no, Tecumseh!! DON'T take those blankets!!," (you know, the smallpox and all) but then again, maybe that's a little too dramatic?
The way I see it (if you don't need a short but colorful recap, skip this paragraph), "Social Security" is fraudulently sold as a retirement program when it's really a tax (F.I.C.A.) in a fake marriage with a welfare program. The scam started life as VERY "actuarily sound" -- meaning at least 46% of those who paid-in would die before they collected a penny (and obviously many more would die before they collected an amount equivalent to what they paid in F.I.C.A. taxes).
But don't take my word for it - - - how about U.S. Vice President Dick Cheney - - -
|Social "Security" -- a scam from the get-go|
|U.S. Vice President Dick Cheney, April, 2005|
And, in the cinematic tradition of dastardly villains, as the scam progresses, it ends up sticking it to the poor even more than when it was first conceived in at least two ways. And both ways are independent of what degree SS's promises to us old folks amount to "unfunded liabilities" -- even if the answer is zero. But if the answer's NOT zero, the question is, what happens when the folks who "win" the SS lottery go to the cashier's window and find out the casino's broke? Munchkin, do you think Jeff will be there for us with his Russian "roof?"
1. As the F.I.C.A. tax burden is increased by the founding and administering organization (U.S.A. Corp.) -- and it regularly is -- the tax burden is passed downwards toward the less affluent because of the income caps (you only pay FICA on the first $100,000 or so) -- AND unlike so-called income tax, it isn't "graduated" depending on how much you make. Both factors mean F.I.C.A. is steeply "regressive".
|Chart 2-3. The Federal Government Dollar -- Where It Comes From|
Keeping that regressive nature in mind, you can see the result of these continual government-instigated changes in SS on the OMB web site. In particular, you'll find "Chart 2-3. The Federal Government Dollar -- Where It Comes From" interesting. Notice that about 33% of FedGov income is from "Social Insurance Receipts." You might also notice that as of 2002 , FedGov only gets about 10% of it's income from "Corporate Income Taxes."
|Chart 2-6. Composition of Revenues|
Next take a look at "Chart 2-6. Composition of Revenues." Notice that while the percentage of FedGov income that comes from "Individual Income Taxes" has remained relatively stable at about 45% since 1956, "Social Insurance Taxes" have increased from about 11% to around 33% thru that same period. And notice that in the period while "Social Insurance Taxes" were increasing, the proportion that came from "Corporation Income Taxes" (and Excise Taxes) decreased proportionally. You might also note that the total percentage of the cost of (Federal) government that comes, directly or indirectly  from your pay check in the form of "Individual Income Taxes" plus "Social Insurance Taxes" has risen to about 83% as of 2002.
2. The benefits from the welfare part of the scam are constantly changed, always toward later retirement, (perversely the economic logic of the system suggests the best is if folks retire after they're dead -- which is the way it started, remember).
Thus the chronic changes in SS mean the poor 1. Pay more, and 2. have to work longer before they retire. And via. "Social Security," 3. the burden of paying for government has been shifted onto the poorer folks. And away from the corporations.
And this is regardless of whether or not there are those pesky "unfunded liabilities" to contend with.
Or am I missing something here?
By the way, there isn't any argument about the fact that F.I.C.A. is a tax, now is there? Or that it is spent by the government as is any other tax revenue? Or that it doesn't go into a "retirement fund?"
I know it's mind-bending. Your mind wants to skip right over the little fact that what we call "Social Security" is really a tax in a fake marriage with a welfare program. After all, most of us KNOW it's a retirement plan right? Everyone's told us so since kindergarten - - -
Then why do they list the money they get from us through F.I.C.A. as coming from a "Social Insurance TAX"?
O.K. Then you're with me this far.
So why is it, then, that governments always seem to favor the rich over the poor? And regularly do other bad things -- like kill an estimated 200 million men, women and children just since the dawn of the 20th Century (with "war" as an excuse for less than a quarter of those killings)? And why does everything governments touch seem to turn to crap? (We're just discovering things aren't all hunky-dory in France -- now keep your eye on Germany.)
Almost seems like a law of nature, doesn't it?
That's because it is - - -
The key is in four of the eight questions I asked in an earlier post, in particular,
1. How do "citizens" control governments and government entities?
6. How do citizens control market entities?
8. Is it more important to control market entities -- or to control government entities? Why?
9. Which is harder to control? Why?
Health, happiness, & long life, L. Reichard White
P.S. The way the "unified budget" works -- and another scam with the way the SS funds are "accounted" -- explains some other anomalies, but not in this post!! Too busy reading up on Tom's links.
P.P.S. While you're on that OMB page, check out "Chart 2-9. On-and Off-Budget Surplus Projections" (clear at the page bottom). QUESTION OF THE DAY: Keeping in mind that that chart was prepared in 2002, what's grossly -- and I DO mean GROSSLY -- wrong with that chart?
P.P.P.S. Because on paper, SS is a tax in a fake marriage with a welfare program -- but in people's minds it's a "retirement fund" -- SS has a split personality. As one of the personalities sees parts of the other, wierd things start to happen. Like the file cabinet in Parkersburg WVA Dubya visited showing the FedGov pseudo I.O.U.s that have been archived there as evidence of the F.I.C.A. tax revenues collected and spent on things other than SS. That would be like having a filing cabinet containing all the receipts for your retirement money your corrupt business manager spent on his McMansion, cars, Carnival cruises and expensive women. Or the retirement-account-like statements showing how much you would have in your SS account -- if there actually was one. Du du du du, du du du du. (Twilight Zone theme).
 I'm not sure why this OMB page hasn't been updated since 2002. I, naturally, suspect. a la Ringo, incompetence, but perhaps you've noticed I seem to be highly biased. On the other hand, remember the Federal Reserve is no longer revealing M-3 -- the broadest measure of money in circulation, an increase in which, via "The Law of Supply and Demand," heralds inflation. return
 "Indirect" as I've used here, opens another "how many mega-byte dollars can dance on the head of a pin" type discussion: Half of Social Insurance Taxes are paid by your employer (or you're supposed to pay "Self-employment Taxes). The argument is, if those taxes didn't go to the government, supposedly into your non-existent retirement fund, they would be available to pay to you directly. return