Do not go gentle into that slim retirement

It had been months, but I sent another letter to Randy Feenstra, my Congressional Representative (I-04), and he once again added me to his email list. I don’t usually read his missives, but a question in the newsletter’s subject line caught my attention.

Do you support keeping Social Security solvent? Yes or No

Surely it was rhetorical. Who in Randy Feenstra’s district would say no? We’re deeply rural and sure, there are wealthy people in western Iowa, not Elon Musk wealthy, but some people are very well off here.

Maybe those people don’t care about Social Security. Maybe Social Security is pin money for them, but for others it’s their chief source of retirement income, and who can live on Social Security alone?

If you’re familiar with historian Heather Cox Richardson, you will have read about Frances Perkins and how Perkins’ work as Security of Labor ushered in the passage of the Social Security Act in 1935.

In addition to her work implementing Social Security, Perkins was also behind the implementation of child labor laws, unemployment insurance, and a federal minimum wage. All these tools are part of a social safety net, a way of giving people a hand up when they need it most. Now we have people in power who would rather slap away that hand and let it go begging.

When some talking head says that we need to get rid of Social Security because it’s an entitlement, your BS detector should be red hot. It is not an entitlement. It’s a payroll tax; part of your paycheck goes to fund Social Security. You pay 6.2% and your employer pays an equal amount. That total of 12.4% taxation funds a big retirement account, and at the end of your working life, you draw from that account.

You’ll hear that too many Baby Boomers are drawing on Social Security, and the system will be out of funds in a few years, but the American public has not been told the whole truth about Social Security.

Even reading official documentation about Social Security gives a somewhat skewed view of its impending doom. The simple fact is that if every employed person — EVERYONE — paid their fair share, Social Security would be funded well into the future.

Yes, the Boomers are retired and retiring, and yes, they are drawing down a lot of that retirement account. Yes, there are fewer young workers to pay into the system, and yes, that leaves a shortfall in the current system as it stands. I repeat: As it stands.

The truth — that few talk about and almost no one seems to know — is that the wealthy and the very wealthy pay only a portion of their earned income in Social Security taxes, while regular folks see all of their paychecks taxed for Social Security. The wealthy benefit from a cap placed on their income, and it is one way their wealth continues to grow.

The current tax cap is set at $176,100. Anything above that amount is not subject to be taxed for Social Security. So, if you make $250,000 a year, anything above the $176,100 does not get taxed. Most of us don’t make that much, so 100% of our income gets taxed.

As income increases, the overall percentage of what gets taxed for Social Security decreases. So, the little guy gets screwed, not just personally, but collectively.

In 2023, when the tax cap was $160,200 former Labor Secretary Robert Reich created some videos about economics. In one of them he illustrated the inequality created by the tax cap: “A CEO who makes $20 million a year pays 1% of their income to Social Security, while anyone who makes less than the cap, 100% of their income gets taxed for Social Security.”

The ultra-rich person paid 1%. I used to bristle when someone said the system was rigged because it sounded conspiratorial, but the Social Security system is rigged. As the 1920 song, “Ain’t We Got Fun” says, “The rich get rich and the poor get poorer.” Written over a hundred years ago, in the wake of the Gilded Age, the lyrics of poverty and want are all too current.

This tax cap also known as the wage base limit is a little-known reason why Social Security is in shortfall, and it’s past time that we the people speak out. As Robert Reich stated: “As more of the nation's income has gone to the Super Rich, logically a larger share of the nation's income goes untaxed for Social Security.”

That’s the real reason why Social Security is in danger of being insolvent, but Randy Feenstra isn’t going to tell you that. He and his ilk will continue to bang the drum for privatization or ask you to contribute even more of your paycheck to Social Security. Some in power even want to reduce your Social Security benefits. All of these “solutions” are evasive measures so people like Feenstra don’t have to pay their fair share.

As protestors swarm the odd town meeting or take to the streets and chant, “Tax the rich!” let’s remember in our chanting that the rich have been skating away from their responsibility to Social Security for too long.

Feenstra and other wealthy people don’t want to cough up their fair share, but we’re not asking for anything unjust here. A lot of politicians don’t want us to know about the tax cap because changing it will affect them and rich constituents. I know it’s not likely that the situation will change because they have the power, and we don’t.

Still, we don’t have to silently accept their solutions that will benefit them and continue to be unjust for the rest of us. We have been shouldering the burden for too long. At least we can raise our voices and make sure others know about this loophole.

And remember: Politicians work for us. It bears repeating: They work for us. They work for us. They work for us. What has your politician done for you lately?

Joan Zwagerman was shocked to learn about the Social Security tax cap. She hopes you will be, too.