I hate Social Security. I hate the idea of the government taking money form me in order to serve my "best" interest in the belief that I'm too stupid to be able to save my own money (Probably true for most Americans but I should not be punished for the actions of stupid people). But this is not what this post is about. This is about the Tax that they take from you every paycheck. It is a truly evil tax.
1. It is the largest tax most people pay - Yes it is, even higher than most people's federal income tax. That's because not only do you have to pitch in your 7.5% but so does your employer, effectively making it a 15% tax. And it isn't a marginal rate. (You have to earn just under $35,000 for it to break even)
2. It's a stealth tax - You probably don't think about the above reason and thus, completely ignore how large the tax really is.
3. Taxing you multiple times - You pay income tax on your contribution to social security yet NEVER see the money. That's right, your social security contribution is not taken away from your taxable income, thus you pay taxes on it even though you never saw the money. Then, when you actually receive your Social Security check, (if you get that old) you are taxed again.
4. It encourages the government to overspend - since the government currently takes in much more in Social Security than it pays out it is an incentive for the federal government to spend more now since the deficits don't look as big as they actually are. Of course all this does is delay the inevitable, taxes must always equal government expenditures either now or later.
5. It's regressive - That's right. It hurts the poor, the very people the program is supposed to help. How can this be? Because there is a cap on the maximum amount you can be taxed on, about $90,000. After that, you stop paying social security tax. That effectively drops your tax rate by 7.5% as soon as you enter this income bracket (even more considering your employer doesn't have to pay his half either)
This system just keeps giving me more reasons to not like it.