Easy, make it voluntary as it was originally supposed to be.
You are spreading misinformation! Social Security was NEVER meant to be voluntary --
http://www.factcheck.org/2009/03/fdrs-voluntary-social-security/
Q: Did FDR promise that Social Security would be voluntary? Did Democrats end tax deductions for Social Security withholding?
A: Social Security has never been voluntary and taxes paid to support it have never been deductible from federal income taxes. A widely e-mailed "history lesson" gets nearly all its facts wrong.
FULL ANSWER
This elaborate collection of falsehoods is so detailed that we believe it must be an intentional and malicious effort at disinformation. It grafts some new whoppers on top of a list that we debunked in April 2004, in a special report we called "Lies in the E-mail, Part 2." The earlier version, we said, was "full of laughably inaccurate claims," and this one is worse.
FDR Never Promised That
Well address the newer claims first, specifically the five "promises" supposedly made by President Franklin D. Roosevelt at the inception of the Social Security system in 1935. We rely here on no less an authority than the official historian of the Social Security System, Larry DeWitt, who has written up a detailed response to these claims under the heading "Myths and Misinformation About Social Security," which can be found on the Social Security History Web page, along with answers to other frequently asked questions.
1
.Not Voluntary. Contrary to the e-mails very first claim, FDR never promised that "the program would be completely voluntary." It is supported by taxes and participation has never been voluntary. As historian DeWitt states: "From the first days of the program to the present, anyone working on a job covered by Social Security has been obligated to pay their payroll taxes. "
2.Not 1 Percent. Another false claim is that FDR promised participants would pay only "1% of the first $1,400" of income. The law FDR signed taxed income up to $3,000, for one thing. And while the rate was 1 percent for the first few years, the law FDR signed raised it incrementally in 1940, 1943, 1946 and 1949, when it reached 3 percent.
3.Not Deductible. Also false is the statement that Social Security contributions "would be deductible from their income for tax purposes." The opposite is true. Section 803 of the law Roosevelt signed specifically says Social Security payroll taxes "shall not be allowed as a deduction to the taxpayer in computing his net income for the year." So the claim made later in the e-mail that Democrats "eliminated the income tax deduction" for payroll taxes cannot possibly be true. There was never a deduction to eliminate.
Update, March 27: An alert reader points out that self-employed persons must pay "self-employment tax," which is a Social Security and Medicare tax similar to the taxes withheld from the pay of most wage earners. Half of the SE tax is indeed deductible when figuring adjusted gross income for federal income tax purposes. However, the SE tax deduction has not been eliminated, not by "the Democratic party" or by anybody else.
4.Trust Fund Falsehoods. The message claims that FDR promised Social Security funds would be used "for no other government program," but that Lyndon Johnson and a Democratic Congress later took Social Security into the General Fund "so that Congress could spend it." This is twisted history. The government has always been able to use Social Security funds for other purposes when not needed to finance benefits. As DeWitt states: "[T]here has never been any change in the way the Social Security program is financed or the way that Social Security payroll taxes are used by the federal government." All LBJ did in 1968 was to make Social Security taxes and spending part of a "unified budget." As DeWitt notes, this was an accounting issue and "has no affect on the actual operations of the [Social Security] Trust Fund itself."
5.Taxation of benefits. The e-mail also gets it wrong when it claims that Roosevelt promised that "annuity payments to the retirees would never be taxed as income." Its true that Social Security benefits werent taxed at first, but DeWitt writes that this was the result of a series of administrative rulings by the Treasury Department, not the result of Roosevelts law or anything he did or promised. And contrary to a false claim made later in the e-mail, it was not Democrats alone who "started taxing Social Security annuities." Congress authorized taxation of Social Security benefits in 1983, when Republicans controlled the Senate, and the measure was signed into law by President Ronald Reagan, a Republican. The measure was part of a bipartisan compromise to shore up the finances of the system, which were then on the verge of collapse.
Nixons Gift to Immigrants
Another huge whopper in this e-mail is the claim that President Jimmy Carter and the Democratic Party "decided to start giving annuity payments to immigrants
even though they never paid a dime into it." In truth, no illegal immigrant is allowed to get a penny of Social Security retirement benefits, as this message implies. (We address more false claims on that theme in another Ask FactCheck.) And any immigrant who has become a citizen or legal resident can qualify only to the extent that they have worked and paid into the system for years, on the same basis as everybody else.
The earlier version of this e-mail made this claim only about the SSI program the Supplemental Security Income program for the blind, disabled or elderly and destitute. But the truth is, that program was signed into law by Republican President Richard Nixon in 1972. Under Nixons SSI law, legal immigrants were eligible for benefits from the start. It is a federal welfare program funded out of general tax revenues and is separate from the Social Security old-age pensions and disability insurance programs funded out of dedicated payroll taxes. While Social Security benefits are paid to those who have paid payroll taxes for a certain minimum period of time, SSI benefits were available to all citizens and legal residents alike regardless of whether they had "paid a dime into it" or not.
Fake Jefferson Quote
The e-mail signs off with a quote that supposedly comes from Thomas Jefferson: "A government big enough to give you everything you want, is strong enough to take everything you have." But Jefferson never said that.
According to Monticello researchers and Jefferson scholars who maintain the online Jefferson Encyclopedia: "We have never found such a statement in Jeffersons writings. As far as we know, this statement actually originates with [Republican President] Gerald R. Ford, who said, "A government big enough to give you everything you want is a government big enough to take from you everything you have," in an address to a joint session of Congress on August 12, 1974."
The author of this urges others to send this message on, smugly suggesting,"If enough people receive this, maybe a seed of awareness will be planted." Hardly. Whats really being spread are seeds of ignorance and a pack of clumsy lies.
-Brooks Jackson
Sources
DeWitt, Larry, "FAQs; Debunking Some Internet Myths; MYTHS AND MISINFORMATION ABOUT SOCIAL SECURITY" Social Security Administration undated Web page accessed 24 March 2009.
"Legislative History; Social Security Act of 1935" Sections 801 & 803." Social Security Administration undated Web page accessed 24 March 2009.
DeWitt, Larry, "Agency History; Research Notes & Special Studies by the Historians Office; /research Note #12: Taxation of Social Security Benefits" Social Security Administration Web page dated Feb 2001, accessed 24 March 2009.
Jackson, Brooks "Lies in the E-mail, Part 2" FactCheck.org Special Report 14 April 2004.
Jefferson Encyclopedia "Government big enough to supply you . . . (Quotation)" Web site article dated 6 March 2009, accessed 24 March 2009.