One of the most common means by which politicians deceive their constitutents is by referring to Social Security as a either a tax or as a retirement system — but usually only as the politics or issues of the day suit them.
We have politicians who stand strongly behind the concept that Social Security must be maintained because it’s a retirement system that people pay for. I certainly believe, as FDR did when he started Social Security, that this is a forced retirement system. As such, it is critical that the entity managing it (the federal government) include Social Security’s actuarially calculated expenses in the current year. By not doing that with their accounting, they are able to simultaneously mischaracterize Social Security as a tax.
If Social Security is truly a retirement and disability plan, it is patently unfair to also consider Social Security collections as a tax that is paid. This is hypocrisy to the citizens contributing toward their retirement. Therefore, when you hear a politician calling Social Security a tax, understand that such a description qualifies it as an entitlement supported the general revenue fund. It can’t be both. The true Social Security Fund, as it is currently being collected and paid out, has been stolen from the taxpayers.
Social Security as a retirement plan has lost its meaning along the way. Yes, benefits promised to recipients have been much more than the amounts taken from pay. For that reason, and for the way by which Social Security is accounted by the government, the system is broken. Nevertheless, we must fundamentally maintain the view that Social Security is the way by which people pay for their own retirement — if we are to fix the imbalances.
The way to lead Social Security back to health is to convince people that the amounts taken from their pay is protected and truly going to their retirement by reclaiming the Social Security Fund so it reflects that reality. Often when it’s realized how little income tax many people pay, the focus typically goes on to how much people do pay toward Social Security. This is not altogether a bad thing. With citizens trying to retire at the age of 65 but often having life expectancies until 90, people need to contribute more money to their retirement.
We need to restore Social Security to a level of sustainability by moving it back to being a path to retirement, view it as a forced retirement system, and hold it accountable in that regard. By modifying the system to be more like present-day 401ks, people can better realize the amount that they are actually putting in. In doing that, more people will ultimately be happy with their Social Security accounts and will also make a mockery of such recent legislation as the payroll tax holiday.
If though, the powers that be continue to insist Social Security is a tax, then the fact becomes that people are really not paying for their own retirement. Therefore beneficiaries are not entitled to anything other that what Congress on a whim decides, because it is subject to the general revenue fund via tax revenue. This would be an outrageous outcome. It turns Social Security into a means by which the people are dependent on government to provide a modest stipend by extracting money from us.