The Carter Administration can boast of one big achievement for its first year in office — passage of a tremendous increase in Social Security taxes. The increases will range from 20 percent to 200 percent, depending on the individual wages taxed.
The maximum tax, which is divided equally between workers and employers, will rise from the present $1,930 to $6,090 by 1978. Over the next ten years, this new law will add a tax burden of $227 billion that, in its ultimate effect, will be paid largely by middle-income workers.
While there has been a general realization that the Social Security system is in need of massive injections of new taxes, Congressmen have tiptoed around the real causes of the problem. Nobody seems to want to discuss why a system apparently sound and solvent in the 1940s, 1950s and 1960s is now facing financial disaster, with the prospects getting bleaker instead of better.
The failure to identify, discuss and come to grips with the causes of the current dilemma are compounded by the failure to face reality in making future projections. Even the tremendous tax increases voted last month will not be nearly enough if social and economic trends continue in the future as they have in the past.
The possibility of containing Social Security benefits within the boundaries of the new tax levels is based on future prospects that are at best optimistic, but more likely are totally unrealistic.
The basic cause of the Social Security problem is the tremendous drop in the birth rate. In 1957 the national rate was 3.7 children per woman of child-bearing age. The rate has now fallen to 1.7 children per woman of child-bearing age. The new law is based on the illusion that this rate will suddenly reverse itself and jump up to 2.1 children.
The entire Social Security concept is built on the quicksand of the birth rate. The money you pay in Social Security taxes is not invested and saved for your pension in your old age. The benefits you receive when you are over age 65 do not come from the money you paid in, but from young workers who are paying taxes at that time.
There are several causes for the decline in the American birth rate, including widespread use of commercial contraceptives for a generation, the exodus of housewives from the home into the labor force, and the well-financed, false propaganda that the United States is overpopulated.
A principal cause, however, is legalized abortions, which have been killing about 1,200,000 unborn babies a year. Our senior citizens do not seem to realize that, quite apart from ethical considerations, their own economic interests should have required them to oppose abortion, whether authorized by the 7-to-2 Supreme Court decision in January 1973 or by New York Governor Nelson Rockefeller’s veto.
The new Social Security cost projections are also based on the dream that inflation will drop to four percent a year and that workers’ incomes will increase 1 3/4 percent faster than the cost of living.
All present economic trends show that, contrary to these hopes, inflation is increasing not diminishing, and the value of our dollar is falling at a frightening rate. Plans of the Carter Administration to continue big foreign and domestic spending programs will only aggravate this.
Congress was so afraid to face the voters after voting the big increase in the new Social Security bill that it indulged in customary chicanery to avoid retribution from the voters. The vote was taken in a non-election year, 1977, hoping that the voters will forget by the election of November 1978, but the tax increase is scheduled go into effect in 1979 after those who passed it are safely reelected.
Even if the present Congress gets by with socking it to the taxpayers in the new law, facing up to the financial insolvency of the system is still ahead of us. There is simply no way to avoid collapse of the Social Security system in a nation that practices abortion, inflation, and dollar devaluation.
