Tag Archive for cuts in Social Security

Cuts to Social Security: same as tax increase

Obama and Boehner repeatedly say they will not raise taxes, not even to return taxes on the wealthy to the levels of the Clinton or Reagan Eras. Instead, they propose cuts to Social Security, Medicaid and Medicare.

It is important that all Americans look very closely at this “modest proposal.”

Social Security is a trust fund, INDEPENDENTLY FUNDED, with a $2.6 trillion surplus and will pay full benefits for the next 25 years. The government has repeatedly “borrowed” without repaying and actually owes a debt to the fund. Social Security did not cause the deficit. Some of the causes are the recent tax cuts for the wealthy, several wars, bailouts, loopholes and no taxes for the wealthiest big corporations.

For years, working Americans have paid into the Social Security trust, much as a person might pay into an annuity and expect to collect on retirement. To suddenly make cuts, overtly or covertly, to what people can collect means that effectively the contributions that the working poor and middle class Americans have made becomes a tax on them.

An analogy to the current proposal might be that two sons are each left a certain amount of money in a trust fund. The first son spends his money on cars, yachts, and other luxuries and goes broke. The other son is saving his trust for his retirement or for when he is no longer able to work. The first son, having become accustomed to an extravagant life style goes into debt, and borrows money from the second son. Finally, as debt becomes even greater the first son feels entitled to the second son’s reserves and pursues legal action to gradually take the money his brother has quietly set aside for old age or infirmity.

Think about it. If you do not receive your portion of the Social Security trust, all that you have paid, and will pay, into the trust is effectively a hidden tax on you, a working American.