Social security breakdown

By Danielle Brooke Ruckert | gargoyle@flagler.edu

#Whyismypaychecklessthisweek was a trending topic last month on Twitter, when every working person in America became aware of the 2013 changes in taxing after receiving their first paycheck of the year. The payroll-tax holiday expired January 1, 2013, raising worker’s share of the Social Security tax from 4.2 percent to 6.2 percent.

Personally, I’ve noticed a small reduction in my bi-weekly paychecks and began to do some research. After interviewing recent Flagler College graduates and hearing the same answer six times, I’ve come to the conclusion that many recent graduates of Flagler College have definitely noticed a larger chunk of their income missing from each paycheck, but are not familiar with the reasons behind this.

As someone who has always been a “Why?” person, I have thousands of questions about everything from “Why would Congress create a tax holiday?” (Answer: to give American’s the opportunity to be more liquid and increase buying in the markets) to “Why would Congress allow the holiday to expire if we are still in a recession?” (Answer:the tax holiday was originally only supposed to last one year). My question now, is why are we continuing to pay a social security tax?

Generations Y and Z, myself included in that bracket, pay social security “for the old people,” as many say. However, the purpose of social security is essentially not to support our elders, but to invest in a program that will help to support us when we reach the age of retirement. Why do we continue to pay into something to which we will reap little or no benefit? That remains to be a question unanswered.

A Ponzi scheme is the payment of returns to existing investors from funds contributed by new investors. While Ponzi schemes and Social Security have similar structures, Social Security payouts have always been openly endorsed by constantly incoming tax revenue and interest being received from the Social Security system’s Treasury bonds. As the government program is unlikely to suddenly collapse and participation in the program is necessary in order for someone to join the U.S.Labor Force, Social Security seems to stand strong in the current America.

Nevertheless, in the 2012 annual summary of reports, Social Security trustees believe that the trust fund reserves subsidizing Social Security will be empty by 2033. I am a 22-year-old, so my retirement year, as of today, is 2061. It is obvious that upon acquiring a job post-graduation this year, I need to begin putting money away if I plan to retire one day, because the retirement plan the government provides will have to support too many people without enough assets.

If many people, like myself, are already under the impression that Social Security is a fizzling plan, why then, do we continue to pay into this entity? Why have we not come up with an alternate plan of action to accommodate for our ever-growing population? When fiscal bills are presented to the government, they must be first introduced in the House of Representatives for the simple reason that our Founding Fathers wanted the people to be in control of their finances. How then, as a government of the people, can we continue to complain about tax holidays expiring and tweet about why our paychecks are smaller, when we refuse to come up with changes to the system? We are ignoring a very real problem that the generations of America’s youth will face, why?