American citizens pay a relatively large percentage of their paycheck towards taxes and social security. Some people feel that the percentage that goes towards taxes and social security is too high, but others feel that paying taxes is a social necessity, and that taxes should be paid to help people who are struggling. Social security is a program that is primarily designed to assist the elderly with their retirement, although there are a variety of different programs that are classified as “social security.” In the United States, social security programs are usually funded through payroll taxes. To understand the various nuances of social security programs in the United States and elsewhere, it is important to analyze the various laws that govern social security programs; similarly, understanding the purpose, history and changes in social security programs and how the programs have changed today will help discuss the issue of whether or not taxpayers should have a say in what their social security money is used for.
In the United States, social security refers to a group of programs that include the Federal Old-Age and Survivors Insurance Trust Fund, the Disability Insurance Trust Fund, the Federal Hospital Insurance Trust Fund, the Federal Disability Insurance Trust Fund,and the Federal Supplementary Medical Insurance Trust Fund (Ssa.gov). Together, these programs are referred to under the umbrella term “Social Security Trust Fund” (Ssa.gov). Each of these programs is designed to assist a different subset of society with a variety of different issues, but essentially, the idea is the same regardless of the program: social security programs use taxpayer dollars to support individuals within society who are having a difficult time having their needs met for one reason or another-- sometimes, the reason is age, whereas other people may not have health insurance; regardless, social security programs are designed to help support these individuals so that they do not become ill, homeless, or otherwise impaired without some kind of help getting back on their feet with employment, housing, or medical aid.
When discussing social security programs, people often think of retirement programs for the elderly, but this is only one portion of social security. One social security program that every American citizen is eligible for in times of crisis, for example, is the unemployment benefits program; this program is designed to help Americans find work when they are having difficulties (Ssa.gov).
The level of taxation that an individual pays to social security is determined by his or her level of income, because it is a tax program that is scaled based on an individual’s income level, rather than being flat-rate tax that is the same regardless of income level (Ssa.gov). According to the Center on Policy and Budget Priorities, it is one of the largest programs that taxpayers pay into:
Another 22 percent of the budget, or $773 billion, paid for Social Security, which provided monthly retirement benefits averaging $1,262 to 36.7 million retired workers in December 2012. Social Security also provided benefits to 2.9 million spouses and children of retired workers, 6.3 million surviving children and spouses of deceased workers, and 10.9 million disabled workers and their eligible dependents in December 2012.
This is a massive amount of money for taxpayers to spend every year. In addition, there are growing fears that the current generation will be paying into social security programs for the elderly, but by the time their retirement age arrives, the program will be largely defunct because of the large number of Baby Boomers that utilized the program during the economic downturn (Forbes).
This fear that the current generation is paying into a program that they will never reap the benefits of is a growing one. Children of the Baby Boomer generation are, by and large, graduating college and having difficulties finding jobs; many of them are unemployed or underemployed for their educational level (Forbes). When they do find work, they pay a large percentage of their salary into programs like social security-- a program that is designed to take care of them when they become too old to work. However, it is becoming more and more apparent that the social security system as it exists today will have to be changed if it is to continue into the future.
Many social scientists have commented on the general discontent among young people today. This discontent is attributed to the burdens placed upon them when they were meant to be becoming adults. This is apparent when the issue of social security comes up. There is no other federal aid program that functions like the social security program: the idea that children are paying for the government to pay people who have already paid social security taxes during their time working strikes many as having all the hallmarks of a Ponzi scheme (Forbes). Although this may be slightly reactionary, the idea that the government is using new investors’ money to pay old investors is a fact that causes many economists to question the logic of the program as a whole.
Since the economy crashed in the years following September 11th, 2001, there have been a series of economic problems in America. Unfortunately, no one really seems to know how to solve them; some feel that the government should cut taxes to allow people to have more discretionary income, while others feel that this is the time where the government must create programs that will encourage growth and job creation, as well as expanding social safety nets to help those who were affected by the downturn. Both of these sides make excellent points, and it is important to consider each argument before making a decision about the logic of expanding social security and allowing the taxpayer control over social security program creation.
Without a social safety net, many people in America would suffer. The retirement fund is not the only program that Americans’ social security taxes go into; unemployment benefits, for example, are another type of benefits that American taxpayers pay for through their social security taxes (Ssa.gov). In addition, Medicare and Medicaid are both social security programs, and they are, in theory, available to everyone who meets a certain baseline set of requirements as designed by the government (Ssa.gov).
These programs are expensive to create and run, and the only way for the government to create these safety nets is through the use of taxpayer dollars.
Unlike taxpayers, however, the government has a series of policy analysis experts that can look at the needs of the American people as a whole and the programs that exist, and decide where the money that comes from taxes is needed at any given time. However, if the choice was left to the American people, they may allot money unevenly or unfairly. In addition, there are very few programs that truly allow the individual taxpayer to vote on the usage of money; instead, the taxpayers elect representatives to vote and make policy decisions for them in the government.
The logistical problems alone that would arise if people were allowed to dictate what is done with social security monies would be amazingly large. Because the population is woefully undereducated on the topic of politics and political policies, there are many people who do not understand the nuances of economics and public policy decisions. These decisions have far-reaching consequences, so they should be made by people who have experience making these types of decisions. Policymakers should also have a vested interest in making the right decisions for their constituents.
However, the other side of the debate also has a very legitimate concern regarding tax dollars and the programs they fund: in short, in America, the political philosophy is that every individual living in America is born with the right to freedom and autonomy. Some of that autonomy is traded to the government for security and structure, but Americans maintain their political and economic freedom through being allowed to decide what happens in their government and with their money. By allowing the government to make overarching decisions about where tax monies will be used without consulting the people, they are violating the founding principles of American autonomy.
In addition, there are conflicting reports about whether or not certain social security programs are even helpful to the population that they are designed to protect. Many of them, for example, have huge amounts of bureaucratic red tape that can oust people who truly need help from programs that should be there to support them when they are having crises. According to Forbes:
The SSDI program is a microcosm of what ills the job market in America. When our president took office 40% of the population received some sort of government assistance. That number now stands at over 55%. There is an alphabet soup of welfare programs that create disincentive to seek gainful employment. (Finger).
Some critics of the social security program as a whole argue that the program should not be abandoned completely, but it should be overhauled and made to be a more efficient program, both in terms of bureaucracy and in terms of overall cost-effectiveness. There are some programs, these people argue, that are too easily taken advantage of; some tax money should go towards fighting fraud in the social security system.
Another issue that often comes up in the social security debate that is an incredibly important issue to address is the issue of discrimination in the social security tax program. Some claim that the tax is more heavily weighted towards the lower end of the income spectrum. Lower socioeconomic classes and the middle class pay a higher percentage of their income towards programs under the social security umbrella than the upper-middle class and the upper class (Peoplespension.infoshop.org). This payment schedule is a hotly-debated topic because of the way it burdens citizens unequally based on their income level.
Those who support allowing taxpayers to have an influence on the decision about how tax monies are used in social security programs must address this issue, because if the tax is unfairly weighted, then some voters should have more say in where the money goes than others do. However, in American politics, this is not how voting works-- every individual receives one vote, and each are weighted equally. However, this does not mean that citizens should not be allowed to vote on how their tax dollars are spent; it merely puts more emphasis on the idea that the social security system should be overhauled and made to be simpler and easier to understand.
Social security programs are important programs to have for the health and safety of the average American citizen. However, the social security system as it exists today was designed in a time when things were much different; it has been more than half a century since the first social security programs were signed into law. In that time, these programs have been changed and added to, but these additions, more often than not, have only served to confuse the process and make it more complex and less accessible to people who are potentially in need of social security programs.
Taxpayers work hard for the money that they earn. The government would never deign to tell a citizen that he or she could not use his or her money in any way he or she wanted (barring anything illegal, of course); yet the government expects her citizens to accept that the taxpayer will pay into the social security fund without having any say on the final resting place of his or her hard-earned wages. Although proponents of social security programs as they are today may argue that politicians are elected precisely for this reason-- to make policy decisions regarding taxpayer money-- others may point out that social security programs are getting increasingly complex, and even politicians have difficulty keeping up with the large amounts of laws and regulations that are passed.
Social security as a system must be overhauled and replaced with something that allows for more citizen control over what their tax dollars are doing. The American budget is incredibly complex, but people should both know and have some mode of control over the different aspects of their tax dollars. Fraud is a huge problem in many social security programs, and the American citizenry are very aware of this and dislike it. For instance, Forbes writes:
“We know there are individuals who will purposely withhold or fabricate information to collect government benefits they are not entitled to receive”. Those are the words of the Office of the Inspector General from their hearing on “combating disability waste, fraud, and abuse”. The Senate conducted their own investigation which concluded that fully one quarter of all disability insurance claims decisions were flawed, improperly addressing “insufficient, contradictory, and incomplete evidence, thus increasing the chances of rewarding nondisabled persons.” The study also determined the SSA failed to establish that claimants were properly screened to certify that they satisfied metrics in the medical “Listing of Impairments” to meet eligibility requirements that would qualify them for the DI program. (Finger)
Given this information, it is not hard to understand why taxpayers want to have more control over the programs that they are paying for; no one wants to work hard and then have their tax dollars be used by people who are defrauding the government, often for significant sums of money.
Fraud in the social security system is another reason why the system needs to be seriously reconsidered in the years to come. Because it has become such a large part of the American budget, it is important for lawmakers to look closely at the system as it exists today and try to restructure it so that it is more difficult for people to make fraudulent claims. This will help ensure that only people who are truly in need of the social security programs are getting benefits from the system. According to Forbes, there are billions of dollars lost via social security fraud every year, and prosecution of individuals for social security fraud is relatively uncommon, given the severity and frequency of the crime of defrauding the government (Finger).
Research suggests that without considerable change in the way the social security programs are run in the United States, the United States will face serious economic problems as a result in the relatively near future. One supporter of social security programs writes, “Another way to look at what Schieber and Shoven denounce as a ‘giveaway’ is that it merely institutionalized a benefits system that had already existed informally. Previous generations of workers and their families had taken care of their elderly and infirm relatives out of their own pockets; Social Security translated this system into a funded government program with a far wider base of support” (Peoplespension.infoshop.org). This may be the case, but the benefits are no longer guaranteed to reach the people that seem to need the programs the most.
Taxpayers should have a say in where their money goes, particularly in regards to social programs. However, the programs that exist today are too complex and too multi-faceted for the average taxpayer to spend the time studying to understand. Ideally, the social security system should be overhauled and changed so that fraud is reduced and politicians and taxpayers can make better decisions regarding resource allotment and investment options.
Works cited
Cbpp.org. "Policy Basics: Where Do Our Federal Tax Dollars Go? — Center on Budget and Policy Priorities." 2013. Web. 18 Apr 2013.
Finger, Richard. "Fraud And Disability Equal A Multibillion Dollar Black Hole For Taxpayers."Forbes, January 14. 2013: Print.
Jamespublishing.com. "Social Security Disability Advocate's Handbook." n.d.. Web. 18 Apr 2013.
Peoplespension.infoshop.org. "Is Social Security really a Ponzi scheme? « The People's Pension." 2010. Web. 18 Apr 2013.
Ssa.gov. "Retirement Planner: State and Local Government Employment." 2013. Web. 18 Apr 2013.
