Thursday, September 16, 2021
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Social Security – Income tax or Pension payment?

We’ve been discussing this lately, and there’s nothing I like so well as to settle an issue once and for all. As soon as we reach a conclusion here, we will inform the rest of the country and put this thorny issue to rest once and for all.

This matters because currently Democrats are demanding that we rape and pillage the income of “the rich” (and I’ll remind you that this really torques me off) vs. Republican claims that only about 50% of Americans pay any income tax at all due to a lost social security card, not a large enough household income, or simply not paying it.

Social Security and Medicare are frequently considered pensions and their related taxes (hereafter referred to collectively as SS taxes) paid during one’s working years are frequently considered payments toward those future benefits. Is this a valid assumption or is the SS tax just another income tax? If SS taxes are pension payments and not income taxes, those who say only 50% of Americans pay income taxes are correct. If SS taxes are income taxes, claimants are not being clear in their assertions. So, which is it, people?

Obviously, the taxes are only levied on wage income, so in that way they are income taxes. However, they are not levied on dividends, interest, and capital gains income; they are only levied on wages, income earned through the sweat of one’s brow, for wont of a better description. Since their basis for being levied is income of one kind or another, I’m going to give that point to the “SS taxes are income taxes” argument, though it’s only half a point because not all income is susceptible.

However, there is the assumption that a person paying the tax is going to get something back for it. This is reinforced by the fact that Uncle Sugar mails taxpayers an annual statement giving an anticipated benefit at retirement. That certainly makes it look like a pension payment, doesn’t it?

It does unless you read the fine print. The fine print in your annual statement gives you a quick heads-up that the statement is a fantasy played out in the heads of politicians – otherwise known as a lie. And since we live in a world of reality rather than the euphoria predicted by optimistic politicians (who are really only optimistic that they can get out of office before the fit hits the shan), let’s look at the fine print.

This is the Queen Hotchibobo translation of the fine print (very similar to the King James version of the Bible: Reliable and Trustworthy – except easier to understand): The projections contained on this paper are not worth the paper they are written on, let alone the postage to get it to you. They are fictional numbers created by lying Congresscritters to keep you from seeing the truth as it is: They have spent everything you have ever given them, as well as all the money you ever will give them, as well as all the money your children will ever give them. There is not a chance in H E Double Hockey Sticks that you will ever collect even a fraction of this money because we’ve been lying to you from the very start. There is no savings account with your name on it. There is no lock box. There is no money with which to pay you these benefits. You are more likely to find a unicorn who farts gold dust than you are to get the money promised to you.

Why do we tolerate this? I don’t know. I suppose everyone thinks houses of cards are going to last forever until they fall down. People stayed in a city built below sea level while a Cat 5 hurricane bore down on them with nothing to protect them but dirt barriers constructed by corrupt politicians and their cronies because New Orleans had never drowned before. Barney Frank was willing to gamble taxpayer dollars with sub-prime loans through Fannie Mae and Freddie Mac because he’d never presided over a housing meltdown funded by taxpayer dollars before. People bought stock in Petfoods.com because technology stocks had never dissolved, taking their savings with it before.

And so far, our nationwide Ponzi scheme has not collapsed, but we all know it’s coming (or at least those of us capable of basic math know it.) So it is a pension? Well, it is certainly not a voluntary one. Do any of you know anyone who would willingly give their money over to Uncle Sugar for this “pension” if they were given a choice except the one between compliance and prison? “Not I,” said the cat.

Here’s the fact: It was never even designed as a pension, it was designed around a lie. What is the only permissible “investment” SS can make with your “pension payments”? US Gov’t bonds. That’s it. They are not allowed (thank the good Lord for small favors) to invest our confiscated money in any private business. What are gov’t bonds? Gov’t debt. What happens with the money SS gives the gov’t (just pretend with me for a second that these two things are not just separate pockets on the same Uncle Sugar – otherwise you’re going to see through the lie too quickly and all the rest of my scribblings will be wasted) when they get those special bonds? They spend it.

There is no savings account. There is no lockbox. Uncle Sugar is physically incapable of saving money. Even if they weren’t spending us into oblivion, they couldn’t save money. Ft. Knox is not a savings bank. The Federal Reserve Bank is not a real bank. The Treasury Dept. is not a place to store treasure. They can’t put your money in a coffee can buried in the White House lawn a la Bobby Bare’s Marie Laveau.

Various companies are using hmrc approved umbrella companies to hire external auditors and financial management heads to handle specific finances of a company such as payment of taxes and distributing of salary.

When they take tax money, whether it is called Social Security taxes, Income taxes, Tariffs, Fees, whatever, that money is spent. Period. They can’t save it even with 529 education plan. So whatever you thought you were saving for, you weren’t saving anything. You couldn’t save anything through Uncle Sugar no matter what they called it or what kind of gov’t bond they used to secure it. Every dime you have ever given them, regardless of what they called it, was a straight tax.

That means that any promise they make to pay you money out of your SS taxes/pension payments in the future is a lie. They cannot promise you the wages of your children. You want to know why? Because there is no generational covenant that you can impose on your children. None. If they don’t want to work full time for 25% of their income so you can take 75% to draw a SS check, they will just vote in some Congresscritters who will tell you to go pound sand. And pound sand you will, because you will have no choice. There is no contract. There is no legal obligation. There is no pension.

As a matter of fact, it is the ultimate in assholerly to even pretend like there should be. Seriously, I want you to take it out to a family level. Pretend I am ready to retire. I have $100,000 in debt secured by my house. I have $1,000 in my savings account. Do I get to tell the kids, “Hey, kids, I am ready to retire now, you’re going to have to pay that debt, but my house and my savings are mine.” No. We spent bucketloads of money. Bucketloads. Far more than we will ever pay back. Where do any of us get off saying that we have some kind of payment coming from the gov’t? Talk about brass balls.

So my conclusion? It is not a straight income tax because not all income is affected, though it is certainly a tax on income. It is levied extraordinarily unfairly, as a person with kids gets back all their tax plus some while people with no kids pay 15.3% on every [redacted] dime if they make over $400.

That does not mean that we should screw the rich because they aren’t getting screwed enough. My grandma said it best, “Many hands make light work.” We should all be paying something, with the added benefit that if we all had skin in the game, when the politicians promised bennies with the promise that they were going to pay for it with someone else’s money, people would quit believing them. There’s nothing to make you pay attention to DC like having them throwing your money around like a guy with a stolen credit card.

It does mean that politicians lie. No, that is not news. It does mean that our income taxes are levied in a method that could best be described as economically destructive and more accurately described as crazy pants.

It is absolutely not a pension payment, because you’re not saving a dime, no matter what they tell you. No more than I saved $300 when I spent $800 the other day when I hit that great sale at Macy’s. What I did was spend money. What you are doing is giving Uncle Sugar money and he’s pounding it down a rat hole. If that’s a pension or savings account, I’m Bill Gates.

Conclusion: income tax. Let’s talk about the fundamentally unfair way our tax system is designed; let’s talk about the ridiculous and destructive levels of financial support given to people in housing credits, food stamps, etc.; but let’s not argue any longer that the working poor pay nothing in income taxes. We’ll just alienate the guy who graduated, started a job, and sees that he’s being robbed by the same gov’t that is robbing the rest of us.

And just in case you don’t know who Marie Laveau is, your education is lacking. Come with me to the bayou because you’re just as likely to get Marie’s money as you are to get SS retirement.

UPDATE: I didn’t think to add Mike’s link earlier, sorry GC.

Queen Hotchibobo
I was born in Saginaw, Michigan, and I grew up in a house on Saginaw Bay. My daddy was a poor, hardworking Saginaw fisherman. Too many times he came home with too little pay. Naw, not really, but it sounds more interesting than the real bio, so there you are.

14 COMMENTS

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14 COMMENTS

  1. If we leave aside the issue of the FICA, I still need to know why some think it is a politically smart thing to state that about 50% of Americans pay no income tax. A candidate wants over 50% of the vote, and no one has explained to me how that statement helps you get any additional votes.

    I realize the statement is made in the context of accusations by the left that the rich need to be taxed more. I just think we need to have a better answer to their class warfare rhetoric than to say Oh yeah, well 50% pay no income taxes.

    • Occupying as I do the corner of the room that is in favor of mentioning this little factoid, I will respectfully disagree…well, sort of.

      There’s an old saying that it’s not what you say, it’s how you say it. If someone thinks it’s a good idea to tell that fact to the 50% of Americans who aren’t paying any income taxes in an insulting, accusatory, you’re a scum-sucking lazy lowlife manner, then I completely agree with you. It’s counterproductive.

      However, the Media-Wing of the Democrat Party, along with the Party itself, has been foisting for years the myth that the lower and middle classes are shouldering the burden while the job creators (labeled ‘The Rich’ for purposes of class warfare) walk away scot-free.

      If we want to have a prayer of ever getting this economy moving again, we have *got* to put money in the hands of those who create the jobs. We’ll never be able to do that if most of the people in this country believe that *they* are the ones shouldering the burden while the ‘rich’ escape scott-free.

      So…in the context of getting the economy moving again, I not only believe that it’s ok to talk about how the tax burden is distributed, it is *essential*.

      But to be effective, it must be discussed in a non-pejorative manner.

      • Just because they are going to move all of the debate to the taxing side of the ledger does not mean that we have to go along with it. We need to hammer them mercilessly on the spending that has gone up every year since 1955 and the diminishing returns all of this spending causes us to live in more misery. I know we can smash the meme that the poor and middle class are paying all the taxes without saying half of America pays no taxes. I also think we are in a stronger position hammering away on the spending side of the ledger. We need to smash the meme that we want to return to the spending policy of recent GOP Presidents. We are wanting to return to spending policy unlike anything we have seen in the last 60 years.

      • I don’t think the arguments need be mutually exclusive. The fact is that all workers bear a great burden and the rich workers and non-workers bear a very great and disproportionate burden. Low income workers are literate and can understand this fact. We need not fight the Dems lie with lies of our own. Just the facts mam, and the main fact is that our policies have proven results in making low income lives better via opportunities to make more income and with lower inflation.

    • What kind of a pension has no possibility of ever paying out its obligations?

      And what kind of pension has no assets? None?

      SS does not have any assets with which to pay benefits, none. It is 100% funded by current tax receipts.

  2. You are now Gamecock’s Queen of the End of Orwellian FICA lies! Bravo gal. I would say that this issue matters much more than what your 2nd paragraph states as the reason for this clarification. Yes, Dems lie about what the rich pay and how they define the rich. Basically, to be a Dem is to lie. But when I wrote my recent column on FICA, I had not heard any Dem commentary on the statement of many Repubs that “less than 50% of workers pay fed income taxes”. My objection was that the statement is not true given that the overwhelming majority of lower income taxpayers pay FICA that is not refunded by EITC and that to foist this lie alienates voters! I love what you did with the “pension” issue and with the non-labor income caveat. Yes, that is another reason why the Repubs statements are not true. All federal income taxes and FICA are mixed together to pay domestic, defense and entitlement spending and their is no lockbox! And who knows if we ever draw a dime. Most blacks never do.

    Queen, you deserve the royal title.

  3. To get Old Age retirement benefits, you have to have worked for at least 40 quarters. To get SSI or SSD, I think all you have to have is a SS number, or if you’re an illegal alien, you don’t even have to have that, or if you do, you can pick one up at any Democrat Party Central Committee office.

  4. I agree with “tax.” Confiscation is confiscation. We can’t let Dems rope-a-dope us into their lying class warfare games.

    Many kudos to both you and the southern gentleman/chanticleer for carrying the discussion forward.

    The important topic of messaging is crucial and one needing many voices to articulate. Wonder where the next dispatch will come from (hope that there will be one, because even the Queen does not have the definitive answer to Democrat lies).

    As Pil & others say, the Democrats will this to be all about taxing so they can confiscate more of the wealth of producers. The country must stay focused on the spending and absolute failure of the liberal agenda.

  5. In the Quarter, there’s a small shop with local souvenirs of a dark, peculiar flavor. Pictures can be had with the current front of house Marie for a small remuneration.

    What most don’t know, unless you have a particular need, is the wall in the back of the closet will open. Down a passage hung with relics of past mistakes in judgement, the petitioner walks with payment.

    A length of red silk, good amber rum and honey tobacco sheaves,and a piece of hair are the price for help from Marie Laveau.

    Ask your desire and remember, always remember in dealing with Marie, like the government, once you’ve made payment, she may ask for more.

    Like your soul.

    Been a while since I thought about Marie.
    There was a woman you would not want to be on the wrong side of no matter the plane of her existence.

    It’s a tax in the guise of being there. Held in trust. So if it is held in trust, where’s the compounded interest? Wait, they’d tax that too.
    All I can say is I want what has be deducted since 1974 from my checks back.

  1. If we leave aside the issue of the FICA, I still need to know why some think it is a politically smart thing to state that about 50% of Americans pay no income tax. A candidate wants over 50% of the vote, and no one has explained to me how that statement helps you get any additional votes.

    I realize the statement is made in the context of accusations by the left that the rich need to be taxed more. I just think we need to have a better answer to their class warfare rhetoric than to say Oh yeah, well 50% pay no income taxes.

    • Occupying as I do the corner of the room that is in favor of mentioning this little factoid, I will respectfully disagree…well, sort of.

      There’s an old saying that it’s not what you say, it’s how you say it. If someone thinks it’s a good idea to tell that fact to the 50% of Americans who aren’t paying any income taxes in an insulting, accusatory, you’re a scum-sucking lazy lowlife manner, then I completely agree with you. It’s counterproductive.

      However, the Media-Wing of the Democrat Party, along with the Party itself, has been foisting for years the myth that the lower and middle classes are shouldering the burden while the job creators (labeled ‘The Rich’ for purposes of class warfare) walk away scot-free.

      If we want to have a prayer of ever getting this economy moving again, we have *got* to put money in the hands of those who create the jobs. We’ll never be able to do that if most of the people in this country believe that *they* are the ones shouldering the burden while the ‘rich’ escape scott-free.

      So…in the context of getting the economy moving again, I not only believe that it’s ok to talk about how the tax burden is distributed, it is *essential*.

      But to be effective, it must be discussed in a non-pejorative manner.

      • Just because they are going to move all of the debate to the taxing side of the ledger does not mean that we have to go along with it. We need to hammer them mercilessly on the spending that has gone up every year since 1955 and the diminishing returns all of this spending causes us to live in more misery. I know we can smash the meme that the poor and middle class are paying all the taxes without saying half of America pays no taxes. I also think we are in a stronger position hammering away on the spending side of the ledger. We need to smash the meme that we want to return to the spending policy of recent GOP Presidents. We are wanting to return to spending policy unlike anything we have seen in the last 60 years.

      • I don’t think the arguments need be mutually exclusive. The fact is that all workers bear a great burden and the rich workers and non-workers bear a very great and disproportionate burden. Low income workers are literate and can understand this fact. We need not fight the Dems lie with lies of our own. Just the facts mam, and the main fact is that our policies have proven results in making low income lives better via opportunities to make more income and with lower inflation.

    • What kind of a pension has no possibility of ever paying out its obligations?

      And what kind of pension has no assets? None?

      SS does not have any assets with which to pay benefits, none. It is 100% funded by current tax receipts.

  2. You are now Gamecock’s Queen of the End of Orwellian FICA lies! Bravo gal. I would say that this issue matters much more than what your 2nd paragraph states as the reason for this clarification. Yes, Dems lie about what the rich pay and how they define the rich. Basically, to be a Dem is to lie. But when I wrote my recent column on FICA, I had not heard any Dem commentary on the statement of many Repubs that “less than 50% of workers pay fed income taxes”. My objection was that the statement is not true given that the overwhelming majority of lower income taxpayers pay FICA that is not refunded by EITC and that to foist this lie alienates voters! I love what you did with the “pension” issue and with the non-labor income caveat. Yes, that is another reason why the Repubs statements are not true. All federal income taxes and FICA are mixed together to pay domestic, defense and entitlement spending and their is no lockbox! And who knows if we ever draw a dime. Most blacks never do.

    Queen, you deserve the royal title.

  3. To get Old Age retirement benefits, you have to have worked for at least 40 quarters. To get SSI or SSD, I think all you have to have is a SS number, or if you’re an illegal alien, you don’t even have to have that, or if you do, you can pick one up at any Democrat Party Central Committee office.

  4. I agree with “tax.” Confiscation is confiscation. We can’t let Dems rope-a-dope us into their lying class warfare games.

    Many kudos to both you and the southern gentleman/chanticleer for carrying the discussion forward.

    The important topic of messaging is crucial and one needing many voices to articulate. Wonder where the next dispatch will come from (hope that there will be one, because even the Queen does not have the definitive answer to Democrat lies).

    As Pil & others say, the Democrats will this to be all about taxing so they can confiscate more of the wealth of producers. The country must stay focused on the spending and absolute failure of the liberal agenda.

  5. In the Quarter, there’s a small shop with local souvenirs of a dark, peculiar flavor. Pictures can be had with the current front of house Marie for a small remuneration.

    What most don’t know, unless you have a particular need, is the wall in the back of the closet will open. Down a passage hung with relics of past mistakes in judgement, the petitioner walks with payment.

    A length of red silk, good amber rum and honey tobacco sheaves,and a piece of hair are the price for help from Marie Laveau.

    Ask your desire and remember, always remember in dealing with Marie, like the government, once you’ve made payment, she may ask for more.

    Like your soul.

    Been a while since I thought about Marie.
    There was a woman you would not want to be on the wrong side of no matter the plane of her existence.

    It’s a tax in the guise of being there. Held in trust. So if it is held in trust, where’s the compounded interest? Wait, they’d tax that too.
    All I can say is I want what has be deducted since 1974 from my checks back.

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