Sunday, July 11, 2010

New York Times Social Security

Chicago Sunday PM July 11, 2010

Editors, The New York Times


The New York Times Saturday 10 July OpEd “Make Social Security Pay, Today” claims that “Under Social Security, nearly all workers pay for their own retirement benefits.” No wage earner has ever paid a penny out of their own bank account to pay for Social Security retirement benefits. Do you think FDR trusted 50 million individuals to mail in 1% of their gross pay every week? Social Security has been a tax on employers from its 1935 inception: all contributions come from employer bank accounts, never wage earners' - if the funds don't get to Washington, the employer goes to jail, never the wage earner.

But not to worry, employers are required by law to state on the pay stub that if the feds were not requiring this tax, the employer would have given the money to the wage earner. Even better, unlike the wage earner, the employer can add the tax cost to the price of his product, transforming the Social Security contribution to a silent, painless national sales tax. According to the 2010 Statistical Abstract of te US [table 463 page 308] in 2008 this tax amounted to $900.2 billion – 35% of the entire 2008 federal tax receipts of $2,524.3 billion.

The OpEd further claims that wage earners' alleged contributions are “... converted, through a complex formula that emulates the workings of an individual retirement account, into a stream of retirement benefits.” The United States Supreme Court said of those 'benefits' in its 1961 Fleming vs Nestor Decision:

“The noncontractual interest of an employee covered by the [Social Security] Act cannot be soundly analogized to that of the holder of an annuity, whose right to benefits are based on his contractual premium payments. To engraft upon the Social Security System a concept of 'accrued property rights' would deprive it of the flexibility and boldness in adjustment to ever-changing conditions which it demands and which Congress probably had in mind when it expressly reserved the right to alter, amend or repeal any provision of the Act.”

Arnold H Nelson

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