Do You Have an Ownership Interest in Social Security?

Many people think that Social Security is guaranteed. They think they have an ownership right to amounts they have paid into the system in the form of taxes over their working lives. That assumption is not correct.

The United States Supreme Court in Helvering v. Davis decided in 1937 said, "The proceeds of both the employee and employer are taxes to be paid into the Treasury like any other internal revenue generally, and are not earmarked in any way." Generally, people believe that Social Security is the third rail of politics, as they say, and that the politicians would never dare to reduce or eliminate benefits. Well, the fact of the matter is that they have done just that. In 1983, Congress cut back benefits for all workers by extending the age at which one may begin to receive full benefits. At the same time, Social Security benefits were subjected to income taxation.

As I mentioned in a previous post, since passage of the Medicare Modernization Act which gave us the Medicare drug program, premiums for Medicare Part B are subject to a means test. This means that retirees with income above a certain amount must pay a higher premium. Some may say that only affects the wealthy. Well, even if that were relevant, the amount of income is not adjusted for increases in the cost of living. Consequently, as time goes on more and more people will have to pay the higher premium.

This system is broken and needs an overhaul. Write your Congressman. Let him or her know that your vote is not for sale.

Save Social Security.