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Who Doesn't Pay Social Security Taxes? And Why?
03-28-2005, 04:52 PM
Post: #1
Who Doesn't Pay Social Security Taxes? And Why?
In light of U.S. President Bush's plans for "personal" accounts (that some call
private accounts") a good look at social security is beneficial. The arguments are seemingly complex. Is there a way to clarify them?

1) In 2000, Congress allowed all workers age 65+ to collect full SS benefits regardless of if they continued to work and earn wages/salaries or not.

2) Limits remain in place for workers ages 62-64. They cannot collect full benefis if they are still working and earning wages/salaries. Is this bias to those who have to continue working in their old age? Minorities? The system is more like enforced saving than tax because, if they live long enough, when they get into the age 65+ bracket they eventually re-gain all their lost SS income while they were in the 62-64 bracket, based on mathematical formulas.

3) Tax cap: When person's yearly income passes $x, they no longer pay SS taxes. Is this unfair to those who never pass the threshold and therefore have to pay SS taxes all year long?

4) Argument that SS is enforced savings for those who will not be able to support themselves in retirement and not a wellfare tax that for the purpose of redistributing income. But "savings" or "save" are not mentioned anywhere in the 1935 act. The word "benefit" is mentioned 25 times. In 1999 82% of the taxes paid into social security were spent to pay for the benfits of current recipients.
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