Social Security and You: Internet Lies About Social Security Never Go Away | Smart Change: Personal Finance

This half-baked harangue next alleges that FDR promised that “participants would only have to pay 1 percent of the first $1,400 of their annual incomes into the program.”

Once again, that’s just an outright lie. The Social Security bill that FDR signed in 1935 taxed income up to $3,000. And that same law called for an incremental adjustment to the tax rate, climbing from 1% in 1936 to 3% by 1949. Roosevelt and all legislators knew that, as the program grew in the future, its funding would also have to grow.

The wacky writer then falsely says, “the Social Security tax rate is now 7.65 percent.” That’s a common misperception. The Social Security tax rate is 6.2%. The other 1.45% is used to fund the completely separate Medicare program.

By the way, the last time the Social Security tax rate was increased was in 1983, during the administration of Ronald Reagan, definitely not a Democrat!

And speaking of Reagan, he gets a pass on something that the internet diatribe blames on President Bill Clinton. Specifically, the angry old goat wrote this: “Which political party started taxing Social Security? Answer: Clinton and the Democratic Party, with Al Gore casting the tie breaking vote.”

In truth, Social Security benefits were first made taxable during Reagan’s administration in 1984. But I should point out here that the idea to tax Social Security benefits was one of the proposals of the 1982 National Commission on Social Security Reform. This was a bipartisan commission headed by Alan Greenspan that was charged with coming up with solutions to Social Security’s pending financial woes. In addition to taxing benefits, some of their other proposals included increasing payroll taxes and raising the retirement age from 65 to 67.

(Excerpt) Read more Here | 2020-09-02 07:00:00
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