Reagan rips off workers
Greider vs Geitner
As a former employee of the Social Security Administration, I was thrilled to see William Greider’s article “Looting Social Security” (The Nation, January 25, 2010). The massive surplus figures of $3 trillion are readily available, but the mainstream media seem unable to find them.
I would quarrel with the tendency to define Social Security as an entitlement. It’s the Federal Insurance Contribution Act (FICA). It’s an insurance program paid out of wages. Benefits are distributed according to the amount paid in and years worked.
A looting issue Greider didn’t address was the outright criminal theft from lower and middle class workers. Social Security is a flat tax, so deductions begin with the first dollar of wages each year. Deductions continue up to a ceiling. In 1981, when Ronald Reagan became president, that ceiling was $29,700. When Reagan left office it was $48,000. Today it is slightly over $100,000. When that ceiling is reached, which happens only for the richest Americans, it’s like receiving a huge tax cut. The exception is Medicare for which there is no wage ceiling. That deduction is about 1.5% plus a matching amount from the employer. Healthcare for our oldest, sickest, neediest citizens costs 3% of wages in the public sector. For the younger, healthier segments of society, it is 17% of GDP.
Reagan also increased the percentage of deductions by 25%. In effect, there was a 55% tax increase on lower and middle class workers. That is the largest tax increase in history. It also is the largest larceny in history. The mainstream media missed that one too.
The final turn of the knife is the interest paid on the bonds bought by surplus Social Security contributions. Reagan used the bond money to conceal the costs of tax cuts for the wealthy and a massive military buildup to spend the Soviet Union into the Stone Age. That interest plus the principle must be paid back out of income taxes. Part of a worker’s income taxes goes to replacing his own Social Security contributions.
As a former employee of the Social Security Administration, I was thrilled to see William Greider’s article “Looting Social Security” (The Nation, January 25, 2010). The massive surplus figures of $3 trillion are readily available, but the mainstream media seem unable to find them.
I would quarrel with the tendency to define Social Security as an entitlement. It’s the Federal Insurance Contribution Act (FICA). It’s an insurance program paid out of wages. Benefits are distributed according to the amount paid in and years worked.
A looting issue Greider didn’t address was the outright criminal theft from lower and middle class workers. Social Security is a flat tax, so deductions begin with the first dollar of wages each year. Deductions continue up to a ceiling. In 1981, when Ronald Reagan became president, that ceiling was $29,700. When Reagan left office it was $48,000. Today it is slightly over $100,000. When that ceiling is reached, which happens only for the richest Americans, it’s like receiving a huge tax cut. The exception is Medicare for which there is no wage ceiling. That deduction is about 1.5% plus a matching amount from the employer. Healthcare for our oldest, sickest, neediest citizens costs 3% of wages in the public sector. For the younger, healthier segments of society, it is 17% of GDP.
Reagan also increased the percentage of deductions by 25%. In effect, there was a 55% tax increase on lower and middle class workers. That is the largest tax increase in history. It also is the largest larceny in history. The mainstream media missed that one too.
The final turn of the knife is the interest paid on the bonds bought by surplus Social Security contributions. Reagan used the bond money to conceal the costs of tax cuts for the wealthy and a massive military buildup to spend the Soviet Union into the Stone Age. That interest plus the principle must be paid back out of income taxes. Part of a worker’s income taxes goes to replacing his own Social Security contributions.
posted by Unknown at 9:36 PM
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