|Nancy and Chuck: getting ready to sell out the middle class|
The other part of the social security trust fund are interest payments on the bonds the government theoretically sells the trust fund when it takes social security tax money and uses it for other things, mostly wars and toys for the generals.
But aren't government bonds tax free? Exactly. Rich people pay no federal income tax on the interest from bonds they voluntarily buy from the government, whereas regular people pay tax on the interest from government bonds when the income finally comes to us in the form of social security payments.
And government bonds at all levels have paid much lower interest rates than they would have had to pay if the federal government didn't give itself an automatic "loan" from the social security trust fund.
If Congress is going to talk about cutting taxes, stopping the double taxation of seniors' social security payments should be the first item on their agenda. Social Security payments are way too low anyways: the average is about $1,300 a month, and they are being cut through the "raising the full retirement age" scam.
The first step in fixing social security should be to exclude social security benefits from taxable income.