FICA isn't a tax.

Post #329,407 by Another Scott 7/11/10 12:24:51 PM Reply	FICA isn't a tax. Or that's what some here have argued. ;-) There are arguments to be made (see the comments) that one of the reasons SS has such strong support is that it was intentionally structured as an insurance program funded by a dedicated 'premium', not a benefit paid out of general revenue funded by a 'tax'. I don't think that's an insuperable objection to increasing the income subject to FICA, but it's something to consider. Removing the income limit in one fell-swoop would give opponents a huge target to demagogue and it's not necessary to make the political battle harder than necessary. The system doesn't need more money right now. It can be phased in over time. The main thing I take from the discussion is that SS is not in crisis, and won't be, even if no changes are made. Small adjustments need to be made. Screaming that it is in crisis and benefits must be cut is scare-mongering not based in reality. It makes much more sense to me to make tweaks to the income rather than raise the eligibility age even further or change the benefit formulas to reduce the outgo. Even if, on average, people are living longer than they were in the 1930s, that doesn't mean that it makes sense to have masses of people in their late 60s and early 70s be forced to remain in the work force that long. Bodies and minds wear out, even if the container hangs on.... FWIW. Cheers, Scott.
Post #329,410 by boxley 7/11/10 12:43:17 PM Reply	when the gov removes it from my paycheck, tax and one doesnt need to cut benefits if everyone pays equally and its needs tested.
Post #329,413 by Another Scott 7/11/10 1:33:55 PM Reply	Paging Beep. You're wanted for an argument with Boxley.
Post #329,417 by jay 7/11/10 3:37:40 PM Reply	I agree with Box on this one If the government is taking it out of my paycheck legally, it doesn't much matter if they call it a fee, license, tax, charge, cost, bill, or mandatory donation. It's effect is the same as a tax, you might as well call it a tax. Jay
Post #329,418 by Another Scott 7/11/10 5:09:38 PM Reply	I've made the same argument. I agree. If it's money taken by the government, it's a tax. It doesn't matter to size of your paycheck, or your budget, whether the money is taken for SS or Medicare or the EPA. Someone here, I'm pretty sure it was Beep (but naturally I can't find it), made the argument that FICA was different when we were discussing the bogus story that "half of Americans don't pay tax" - e.g. http://www.washingto...010_04/023260.php FWIW. Cheers, Scott.
Post #329,422 by beepster 7/11/10 6:10:13 PM Reply	It was me and I still don't consider it a tax. Its not supposed to be. Lately its being used as one...with the trust fund being raided to, among other things, make it look like the government was in surplus. I also agree with Box that it should not be capped. And its not a bogus story. Over 50% of the people do not pay income taxes. I will choose a path that's clear. I will choose freewill.
Post #329,481 by andread 7/12/10 10:19:12 AM Reply	If mandatory, then it's a tax
Post #329,484 by beepster 7/12/10 11:43:51 AM Reply	Its all in the name and supposed use Federal Insurance Contribution Act. Its >supposed< to be a retirement fund. I agree, though, that at this point it may as well be a tax, as its proceeds are being stolen (oh, sorry, borrowed) by the government and used as general funds. The benefit of which is at least one President has been able to claim he took the government to surplus (nudge) I will choose a path that's clear. I will choose freewill.
Post #329,494 by Another Scott 7/12/10 12:53:15 PM Reply	s/at this point/since the Greenspan Commission in 1983/ HTH.
Post #329,496 by beepster 7/12/10 3:00:59 PM Reply	Hmm I see where they recommended that a payment be made from general funds to the SS trust fund...don't see where they recommended using the trust as first national bank. I will choose a path that's clear. I will choose freewill.
Post #329,497 by Another Scott 7/12/10 3:50:44 PM Reply	Here ya go. http://www.snopes.co...urity/changes.asp The Social Security Trust Fund was established in 1939 to receive monies collected for Social Security through payroll taxes. The monies in this fund are managed by the Department of the Treasury; they are not, nor have they ever been, put into the "general operating fund." However, whether the Social Security Trust Fund can truly be said to be "independent" is problematic. The Social Security Act specifies that the monies in the fund may only "be invested in securities backed by the full faith and credit of the Federal government," such as treasury bills, treasury notes, and treasury bonds, as well as special issue bonds. So, essentially, the government can "invest" Social Security funds by lending them to itself, then spending that money on programs not related to Social Security (e.g., defense, foreign aid, education). The government "pays back" this money when the Social Security program redeems the bonds, but critics of the program contend Social Security will eventually fall into deficit by 2018, and the Treasury won't have the necessary cash on hand to redeem the bonds and pay back the fund. [...] The excess was always intended to be transferred to the Treasury in exchange for bonds that would be redeemed later. How would it make sense for the money to sit in a vault? There's no "raiding of the trust funds" that went on after 1983 - it worked as it was designed. Now what that funding was used for is a different issue, of course... ;-) There's much more in the link. HTH. Cheers, Scott.

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