"Government is not reason; it is not eloquence; it is force! Like fire, it is a dangerous servant and a fearful master."
George Washington.
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" ... There will always be a party for giving more to the rulers, that the rulers may be able in return to give more to them. Hence as all history informs us, there has been in every State & Kingdom a constant kind of warfare between the governing & governed: the one striving to obtain more for its support, and the other to pay less. And this has alone occasioned great convulsions, actual civil wars, ending either in dethroning of the Princes, or enslaving of the people. Generally indeed the ruling power carries its point, the revenues of princes constantly increasing, and we see that they are never satisfied, but always in want of more."
-- Benjamin Franklin, in a letter to the Federal Constitutional Convention, as recorded by James Madison on June 2, 1787.
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Read Ayn Rand's book Atlas Shrugged
Deseret News, Mar. 8, '99, by James Ferrin, a certified financial planner based in Orem.
Before we clamor to "save" Social Security, let's first understand what we are trying to "save." The Social Security retirement system requires every working American to pay 12.4 percent of his or her income into the system. The 12.4 percent is a tax on compensation - wages or business profits. It is a nearly invisible tax to most Americans because one-half is withheld from the paycheck and one-half is paid by the employer with funds that could have been, but weren't, paid to the employee.
The Social Security tax is not reported or itemized on the tax return for anyone but the self-employed. In this sense it is an enormous but somewhat invisible tax. In exchange, the worker receives a hope for a retirement cash flow starting at age 62, or 65 or sometime; the dates are subject to change. Today's retirees can collect "normal" benefits at age 65. Under rules adopted in 1981, those of us born after 1938 (including close to 80 million baby boomers) will qualify for benefits at a later age. The Social Security Administration recently notified me that under current rules, because I was born in 1956 (right in the middle of all those baby boomers) I can currently hope to qualify for normal benefits at age 66 and four months.
Do you know how much Social Security retirement tax you paid last year? I think most people have very little idea. Take 12.4 percent of your earned income (like wages) to a maximum wage base of $68,400. Anybody making $68,400 or more last year paid $8,109 in Social Security retirement tax - not federal or state income tax - that's extra. I'm talking about over $675 per month just in Social Security retirement tax. This is a fairly significant monthly investment.
ANNUAL
WAGE/SALARY | ANNUAL FICA
WITHHELD plus
employer match | MONTHLY FICA
WITHHELD plus
employer match | ANNUAL FED
INCOME TAX
WITHHELD
1 exemption | STATE
TAX
2% | CITY TAX
.5% | ANNUAL
NET in your
pocket | SALES TAXES
7% OF NET |
| $10,000 | $1,530.00 | $127.50 | $1,500.00 | $200.00 | $50.00 | $7,416.67 | $519.17 |
| $15,000 | $2,295.00 | $191.25 | $2,250.00 | $300.00 | $75.00 | $11,125.00 | $778.75 |
| $20,000 | $3,060.00 | $255.00 | $3,000.00 | $400.00 | $100.00 | $14,833.33 | $1,038.33 |
| $25,000 | $3,825.00 | $318.75 | $3,750.00 | $500.00 | $125.00 | $18,541.67 | $1,297.92 |
| $30,000 | $4,590.00 | $382.50 | $4,453.20 | $600.00 | $150.00 | $22,296.80 | $1,560.78 |
| $35,000 | $5,355.00 | $446.25 | $5,853.20 | $700.00 | $175.00 | $25,355.13 | $1,774.86 |
| $40,000 | $6,120.00 | $510.00 | $7,253.20 | $800.00 | $200.00 | $28,413.47 | $1,988.94 |
| $45,000 | $6,885.00 | $573.75 | $8,653.20 | $900.00 | $225.00 | $31,471.80 | $2,203.03 |
| $50,000 | $7,650.00 | $637.50 | $10,053.20 | $1,000.00 | $250.00 | $34,530.13 | $2,417.11 |
| $55,000 | $8,415.00 | $701.25 | $11,453.20 | $1,100.00 | $275.00 | $37,588.47 | $2,631.19 |
| $60,000 | $9,180.00 | $765.00 | $12,898.20 | $1,200.00 | $300.00 | $40,601.80 | $2,842.13 |
| $65,000 | $9,945.00 | $828.75 | $14,448.20 | $1,300.00 | $325.00 | $43,510.13 | $3,045.71 |
| $70,000 | $10,710.00 | $892.50 | $15,998.20 | $1,400.00 | $350.00 | $46,418.47 | $3,249.29 |
| $75,000 | $11,475.00 | $956.25 | $17,548.20 | $1,500.00 | $375.00 | $49,326.80 | $3,452.88 |
| $80,000 | $12,240.00 | $1,020.00 | $19,098.20 | $1,600.00 | $400.00 | $52,235.13 | $3,656.46 |
| $85,000 | $13,005.00 | $1,083.75 | $20,648.20 | $1,700.00 | $425.00 | $55,143.47 | $3,860.04 |
 | FRAUD!!! |
![[socialsecurity.org]](G/Libertarian/socsec_banner.gif)
In fact, the unfortunate reality for many Americans is that it is the only monthly investment they can make. After paying it, along with all the other taxes and living expenses, there is precious little left over for saving and investing for retirement. Most working-class Americans live paycheck to paycheck, unable to save and invest over and above what Social Security takes. So, predictably, we produce yet another generation dependent on Social Security.
How about that Social Security retirement? Yes sir, can't you just wait till those nice, fat Social Security checks start rolling in? We instantly recognize, of course, the sarcasm. The fact is that Social Security offers only a poverty-level subsistence. Today's highest monthly benefit is about $1,200 per month. The average monthly benefit is just over $700. Is this a livable income or is this poverty? The Social Security Administration projects that if I am fortunate enough to live another 24 years, paying over $700 per month into their system, that I will qualify for a retirement income of $1,630 per month.
J U L I E M O U G E O T T E
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| He Said,
She Said… |
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How fortunate I am that I am able to save and invest my own funds over and above what the Social Security tax confiscates from me, because living on $1,630 per month 24 years from now will be poverty-level misery. But what about the millions of Americans who are not able to actively save and invest, those who pay 12.4 percent of their income in Social Security tax and have little or nothing more to invest? The answer is clear. They will be poverty stricken old folks fully dependent on government, and they will have paid 12.4 percent of their income every month and every year throughout their working lives to get there. I can only think to call it the Great American Poverty Machine, for so it is.
No, we should not attempt to "save" such a system. We ought not even wish it upon our worst enemies, much less on ourselves, our children and grandchildren. We should not hope that Social Security will "be there" for us or for them. We should hope and pray that American politicians will end the politics and socialization of America's precious, sacred investment capital and will end Social Security as we know it.
Working-class Americans, the poor, the middle classes, these folks are the ones most hurt by the Social Security poverty machine because they cannot escape it like higher income earners can. These traditional constituencies of the Democratic Party ought to be screaming to their representatives not to "save" the system, but to replace it - replace it with a fully privatized Individual Retirement Account. Democrats and Republicans alike should be united to eliminate the old system in favor of a completely new privatized retirement program.
Let Americans save and invest their own hard-earned money without government interference. Anyone who really saves and invests 12.4 percent of their income can, over their working lifetimes, make themselves financially independent millionaire retirees, not poverty-stricken elderly of the "Social Security class," regardless of the job they choose.
Social Security is, in fact, the single tallest, most difficult hurdle standing between most working-class Americans and their hopes for security in their senior years. Let's recognize this fact, and let's end it now.
| "On Opting Out"
Alan Greenspan, Fed. Reserve Board Chmn.
"My own preference is strongly in the direction of moving towards a privately financed system."
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Edward H. Crane, Pres., Cato Institute
"Social Security privatization is, nowadays, the single most important step toward a society of liberty. It combines personal freedom with widespread property ownership, and those are the pillars of a free society."
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THE SOCIAL SECURITY TRUST FUND ACCOMPLISHES NOTHING, Heritage Foundation Backgrounder No. 1256, Feb. 22, '99 by Daniel J. Mitchell, McKenna Senior Fellow in Political Economy in The Thomas A. Roe Institute for Economic Policy Studies
TAKING SOCIAL SECURITY PRIVATE, Investors Business Daily, Mar. 17, '99, by Aaron Steelman
A PENNY SAVED IS A PENNY EARNED, Cato Institute, Mar. 11, '99, by Carrie Lips, a Social Security analyst at the Cato Institute
WHY SOCIAL SECURITY IS BANKRUPT, Brainstorm Magazine, Feb. '99, by Ted Abram, American Institute for Full Employment
More short columns
CLINTON'S SOCIAL SECURITY SHELL GAME, Brainstorm Magazine, Feb. '99, by Charles D. Hobbs, Program Director for the American Institute for Full Employment, and Domestic Policy Advisor for Pres. Ronald Reagan, 1984-89
NORTHWEST COMMENTS ON REFORM, Brainstorm Magazine, Feb. '99
Short Columns, That should infuriate you and make you vote for anyone not democrat or republican
A Real Solution to the Social Security Crisis: Testimony of José Piñera, President of the International Center for Pension Reform, Co-Chairman of the Cato Project on Social Security Privatization before the U.S. House Committee on Ways and Means, February 11, 1999
THE SOCIAL SECURITY TRAP, Intellectualcapital.com, Jan. 21, '99, by James K. Glassman, the DeWitt Wallace-Reader's Digest Fellow in Communications at the American Enterprise Institute
SOCIAL SECURITY MEETS THE 21ST CENTURY, Cato Policy Report, Feb. '99, by José Piñera, co-chairman, Cato's Project on Social Security Privatization
SOCIAL SECURITY INVESTMENTS MUST BE MADE BY WORKERS THEMSELVES, Los Angeles Times, Feb. 21, '99 by U.S. Rep. Christopher Cox, (R-Newport Beach), Chairman of the House Policy Committee
FATAL CONCEIT IN SOCIAL SECURITY SUBSIDY, The Wall Street Journal, Mar. 2, '99, by Thomas J. DiLorenzo, Professor of Economics, Loyola College
PRIVATIZE SOCIAL SECURITY ... FOR THE CHILDREN, Investor's Business Daily, Feb. 22, '99, by Doug Bandow, a senior fellow with the Cato Institute
SOCIAL SECURITY REFORM URGED, Denver Post, Feb. 17, '99, by Steve Raabe
THE ADMINISTRATION'S BEWILDERING ASSERTION, Cato Institute, Feb. 19, '99, by Michael Tanner, director of the Cato Project on Social Security Privatization
NINTH-GRADERS WORRY ABOUT THEIR FUTURE, Binghamton Press, Feb. 22, '99, by Wyn Hornbuckle, Staff Writer
GOVERNORS OPPOSE SOCIAL SECURITY FOR STATE WORKERS, Reuters, Feb. 23, '99
A DIFFERENT SOCIAL SECURITY IDEA, The Chattanooga Times & Free Press, Feb. 21, '99, Editorial
