Security and Taxation

My dear reader,

Did you know that your social security is subject to tax? here’s how it works. If you make more than $44,000filing jointly, the government has decided that you make too much. From the government itself, when they introduced the tax in 1983,

“If you file a joint return, you may have to pay taxes on 50 percent of your benefits if you and your spouse have a combined income that is between $32,000 and $44,000. If your combined income is more than $44,000, up to 85 percent of your social security benefits [are] subject to income tax.”

There are many problems with this. First of all, it implies that the government has the right to retroactively tax the benefits that it gives. Furthermore, it implies that the law doesn’t have to recognize inflation in their taxation decrees. The Motley Fool, a popular investment site, describes social security as unfair, in this way.

“The problem with the Social Security tax provisions, however, is that they weren’t indexed for inflation. Indeed, that omission was deliberate, and after just ten years, inflationary pressures had almost doubled the number of Social Security recipients with taxable benefits from 10 percent to 18 percent. If the initial figures had been subject to ordinary inflation indexing, then they would have more than doubled by now. Specifically, based on the recent inflation data compared to 1983, the $25,000 threshold would be close to $60,000, while the$34,000 figure would be more than $81,000.”

A couple who are retirees living on less than $40,000 are up against a wall. With both inflation and taxation bearing down on them, the average retiree is far from the bliss that was advertised to them. Yet the government seems content to take back money that they forced everyone to pay in. Even if you live modestly, you cannot escape this unjust tax. It appears that it doesn’t matter what your money earns, but rather where it is.

To your creation and potential,

Kevin Prendiville