INCOME TAXES ON SOCIAL SECURITY BENEFITS


My Dear Reader,

When Mitch McConnell told the truth about social security late in 2018, the leftist media attacked him relentlessly for suggesting that we pull the longest running welfare program in US history.  Social security has been in trouble for a long time, in fact did you know that your social security is subject to tax? It was implemented to prevent people who “made too much” from taking social security.  Here’s how it works, if you make more than $44,000 filing 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 join 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% of your social security benefits [are] subject to income tax.”  There are many problems with this attitude, 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 10 years, inflationary pressures had almost doubled the number of Social Security recipients with taxable benefits from 10% to 18%.  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.”

This is blatant extortion.  Like paying a mob boss protection money in a New York slum.  The only difference is at least the mob will protect you from rival gangs if you pay them.  The government forces your hand and then doesn’t give you any service.  Unfortunately, unless you can legally move off of the radar screen of the IRS, you’re going to pay this tax and more.  I recommend reading the GEO report of 1994 which talks about loans and the difference between cash flow and income.  While we sort all this out in the meantime;

To your creation and your potential,

Kevin Prendiville