Tag Archives: social security

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Dump Everything

Ohio born political cartoonist Tony Auth is best known for his pieces with The Philadelphia Inquirer, where he worked for over 40 years.  It was during this period that he won a Pulitzer Prize for his publications (Tony Auth Wikipedia).  A political cartoonist’s work is tricky, they must attempt to create a piece which is often supposed to provoke a positive reaction from the reader, but at the same time make a strong political statement.  Auth’s Tea Party Cartoon, posted on April 10, 2010, in The Philadelphia Inquirer, caught my attention not only for attacking the far right-wing Tea Party, but also drawing a parallel back to the Revolutionary War.  Tony Auth depicts the modern-day Tea Party members’ lack of support for balanced taxation and their complete disregard for the defining benefits of being a citizen of a first world country by ironically comparing their beliefs to the principles held by the original participants of the Boston Tea Party, their party’s namesake.

The Tea Party holds extreme views on several topics.  In March of 2010, President Obama’s push for his version of government sponsored health care, the Affordable Care Act, was passed by Congress, but would not fully take effect until 2014 (Affordable Care Act Wikipedia).  This established a government-run health insurance agency that could be funded through taxation, so people who previously were not able to afford health insurance through a private insurer were able to receive basic health coverage.  It primarily taxed the wealthiest 1% of the country and provided healthcare benefits for approximately the bottom 40% (Affordable Care Act Wikipedia). The members of the Tea Party were worried that the United States was headed too far into what they refer to as “socialized medicine”.  The Tea Party has employed the term socialized medicine to scare people into thinking that it is a socialist program, when, in actuality, it is not so different than many other welfare programs already offered by the United States government. Supporters of this health care system often refer to it as national, single payer, or public option healthcare. While the different names do not change the function of the agency, they provide a more accurate description of the Affordable Care Act.  Overall the Tea Party did not favor the version of health care the United States was approaching in April of 2010, their obvious disgust for this type of health reform is visualized by the Tea Party members throwing crates labeled as Medicare and health reform over the side of a ship (Montopoli).

Another one of the largest programs funded by federal taxes is social security.  While the Tea Party is not as cohesively decisive on this topic, they are shown throwing social security overboard in the cartoon.  This is because they seem to have no solution to the issue we currently face with a large increase in the population of elderly people who rely on social security.  The Tea Party does not want to raise taxes, but they also want to avoid deficit spending (Vernon). Ideally, everyone would want social security to exist so long as they did not have to pay for it, and that contradiction is what Auth displays in his cartoon.  He shows members of the Tea Party in 2010 throwing Social Security overboard, almost as if they are proud. Although many Tea Party members believe in the benefits of social security, their stance against taxation contradicts this belief, as taxes are needed to support the Social Security program (Vernon).  In the background, instead of a historically correct sign reading “ no taxation without representation,” theirs simply says “no taxation,” highlighting the Tea Party’s lack of cohesion.

The Tea Party is not looking to reform the public education system, instead they encourage parents to take an active role in making sure their child is getting the best education possible (Tea Party Patriots).  Many people strongly disagree with this belief of the Tea Party. They worry that this will erode away at America’s capitalist foundation. The Tea Party’s belief against helping establish better school systems for impoverished areas stems from their reluctance to give money in the form of taxes to help the poor, as well as their belief in devolution in government (Tea Party Patriots).

When the cartoon is compared to John Knott’s “Arousing the Countryside” cartoon, from the Dallas Morning News on January 29, 1932, many similarities become apparent.  Both Knott and Auth use Revolutionary War time references to spark patriotism in their readers; however, they prove separate points, Auth’s cartoon bashes what it represents, the Tea Party, while Knott’s cartoon appears to support its subject, the State Taxpayers Association of Texas.  Patriotism is a powerful tool when persuading readers because generally people want to be proud of the country they live in.

It is said that a picture is worth a thousand words, and I personally believe that statement.  Both the “Arousing the Countryside” and the Tea Party political cartoons are able to tell a story through past beliefs and maintain an argument for or against modern day beliefs.  It is seen through the cartoons that taxation has been a topic of debate for centuries, and will continue to be so.

 

Works Cited

Auth, Tony.  Cartoon. The Philadelphia Inquirer. 15 April. 2010: Print.

“Education.” Tea Party Patriots, www.teapartypatriots.org/education/.

Knott, John. “Arousing the Countryside.” Cartoon. Dallas Morning News, 29 January. 1932: Section 2, page 2.

Montopoli, Brian. “Tea Party Supporters: Who They Are and What They Believe.” CBS News, CBS. Interactive, 14 Dec. 2012, www.cbsnews.com/news/tea-party-supporters-who-they-are-and-what-they-believe/.

“Patient Protection and Affordable Care Act.” Wikipedia, Wikimedia Foundation, 12 May 2018, en.wikipedia.org/wiki/Patient_Protection_and_Affordable_Care_Act.

“Tony Auth.” Wikipedia, Wikimedia Foundation, 14 May 2018, en.wikipedia.org/wiki/Tony_Auth.

Vernon, Steve. “Do Tea Partyers Support Social Security and Medicare?” CBS News, CBS Interactive, 8 Nov. 2011, www.cbsnews.com/news/do-tea-partyers-support-social-security-and-medicare/.

1937: Social Security Taxes Come to Life

Caught in the Web
American man tangled in a “web of taxes” imposed by several levels of government.

Almost a decade after the start of the United States Great Depression, income tax rates in 1937 rose to a record high 79% for the top-earning bracket (“1937”). The head of the economy at the time was Franklin Delano Roosevelt (FDR), our 32nd President of the United States. When FDR took office in 1933, the economy was coming out of the Great Depression. However, people don’t realize the economy took another downturn in that decade, obviously not as severe, between late 1936 and early 1937. In the 1937 state of the union address, FDR declared a tax crisis (Roosevelt). At the time, income tax rates, corporate tax rates, and capital gain taxes all skyrocketed. Not only were regular taxes high, but direct “use” taxes on gasoline, alcohol, tobacco also soared with the government fiending for extra money to put towards social security (Roosevelt). Social security was one of the most pressing issues of the time, as funds were not enough to support retirees to the end of their lives. To change this, local, state, and national government taxed American citizens. Americans began to feel tangled in a ‘web’ of continuous taxes from every direction.

On tax day (April 15) in 1937, John Knott’s political cartoon, “Caught In The Web,” was published in the Dallas Morning News. In the cartoon, a working-class American is depicted being tangled up in what appears to be a spider web. Within the web is written “FEDERAL, STATE, LOCAL TAXES.” The web has a very complex structure.

The web was supposed to represent the series of taxes imposed on citizens at the time, especially on tax day, by all levels of government. There was a clear meshing of federal, state and local governments, which represents the lack of strong federalism at the time. The man in the web conveyed the message that Americans had no way of escaping the ‘web’ of taxes they were entrenched in. Also, the man was extremely small in comparison to the web, again showing that Americans were overpowered by taxation. However, there’s irony here in that some of these taxes paid by the Americans caught in the web were going towards their own government-made retirement fund: social security. In other words, they were being forced to shrink themselves in a way. In addition, the fact that the web was so intricate and complex also suggests that the tax system at the time was extremely complicated, making it even more difficult for taxpayers to evade the system. Although paying taxes was a fact of life and a necessity for the survival of the nation, the 1930s tax collection system was inefficient. FDR was the first to suggest a consolidation in the tax system to reduce payments for hard-working people but still get the most out of the money collected.

In 1937, personal income tax rates reached an all-time high of 79% for the most wealthy Americans (those earning more than $750,000 per year). For reference, those earning more than $420,000 per year today (the top tax bracket) pay 39% (“1937”). To display the difference between these two rates, a person earning $1,000,000 today would pay $390,000 in taxes versus someone earning that same million dollars in 1937 paying $790,000! In 1913, the top-income tax rates were 7% (“1937”). A 66% rise in taxes occurred in just over 20 years to 1937. Something needed to be changed in the tax system.

President Franklin D. Roosevelt decided to call for a government-wide tax consolidation effort. This would mean one level of government, federal, state, or local, would take charge of their respective tax categories like health care for the federal government or education for the states. This idea would avoid overpayment of taxes by citizens. Federalism, the division of power between the national government and the states, played a major role in this process. Although this system does bring in less tax revenue, it is actually more effective on the economy because decreased taxes increases buyers’ demand for luxury goods. Unfortunately, Roosevelt could never get the consolidation effort moving during his time in office, so therefore tax consolidation had to wait to be taken care of in the future.

As tough as high taxes were for American citizens, they were collected in large part due to insufficient social security funds. The inadequate social security system was described in the Dallas Morning News editorial alongside Knott’s cartoon. At the time, when income rates in specific were sky-high, many taxpayers tried to evade taxes, which was a federal offense. However, because of the huge amount of perpetrators of tax evasion at the time, it was almost impossible to enforce. This caused a problem for social security because the program depended on taxpayers’ money to fund retirement for older working people (Albright).

Social security was a seemingly perfect system. Young people pay towards others’ retirement and they get their retirement paid towards by the future generation of young workers. With tax evaders reducing tax revenue, social security suffered due to its low priority among government programs. Social security was an integral part of the American economy, and without it, people were forced to work longer, hurting business and housing markets that benefit from retirees. Overall, without full social security benefits for citizens, the entire economy began to collapse. To make up for this loss in revenue, many states began to increase already exorbitant income and property tax, but also add sales taxes, “use” taxes, and even additional taxes on gasoline, tobacco, and liquor, all very commonly used products at the time (Roosevelt).

President Roosevelt eventually steered the economy out of the doldrums after several years of frustrating tax levels. Income taxes lowered to standard, pre-Depression levels, and social security returned in full to the federal government. FDR was in charge of the economy when this mini economic depression took place. Due to its proximity to the Great Depression, it is often overlooked in American history. Social security and America’s complex tax system are the main issues displayed in John Knott’s cartoon “Caught in the Web.” Both of these issues remain contested to this day.

 

Works Cited

Admin. “US Inflation Calculator.” US Inflation Calculator, www.usinflationcalculator.com/.

Albright, Robert C. “‘Little Man’ Income Tax Threat Spurs Relief Slash.” The Washington Post (1923-1954),

Apr 16, 1937, pp. 1, ProQuest Historical Newspapers: The Washington Post, http://ezproxy.lib.utexas.edu/login?url=https://search.proquest.com/docview/150926167?accountid=7118.

Knott, John. “Tangled Tax System.” Dallas Morning News, 15 Apr. 1937.

LEFF, MARK H. “Taxation.” Encyclopedia of the Great Depression, edited by Robert S. McElvaine, vol. 2, Macmillan Reference USA, 2004, pp. 963-967. Gale Virtual Reference Library,

go.galegroup.com/ps/i.do?p=GVRL&sw=w&u=txshracd2598&v=2.1&id=GALE%7CCX3404500507&it=r&asid=cbba5683633e9fbba863222b15ab9ecc. Accessed 18 Oct. 2017.

Roosevelt, Franklin D. “President Roosevelt Proclaims the End of Prohibition.” Prohibition, edited by Sylvia Engdahl, Greenhaven Press, 2013, pp. 73-78. Perspectives on Modern World History. Gale Virtual Reference Library, go.galegroup.com/ps/i.do?p=GVRL&sw=w&u=txshracd2598&v=2.1&id=GALE%7CCX2073900016&it=r&asid=9f5464026dea42d48de293eca499b11a. Accessed 18 Oct. 2017.

“1937 Federal Tax Rates.” Rate Limited, federal-tax-rates.insidegov.com/l/22/1937.

Social Security: An Unsupported Support System

American baby boomer nearing retirement, jumping into an empty pool of social security benefits.

Eighty years after the tax crisis of 1937, insufficient social security funds remains a huge issue in society. The real problem lies in that the fact that social security fees and taxes have continued to increase, but the funds raised are not enough to provide sufficient retirement funds for the mass amount of retirees in the coming years. Since 2002, the maximum taxable amount on citizens for social security has risen $20,000 from $85,000 to about $105,000, and it is continuing to incrementally increase (“Social”). Since 2011 and continuing through the next decade, baby boomers (spike in population born between 1946 and 1965) will be retiring. To support the proper age of 66 for retirement, social security capital will need to increase greatly, but it’s impossible to put all that burden on American citizens, otherwise you’d be looking at a similar situation to John Knott’s 1937 cartoon depicting Americans tangled up in taxes. Over the last decade, social security taxes have been steadily rising, yet the benefits to match those increased fees are nowhere to be found. Social security is on the lower end of the totem pole when it comes to governmental programs, and it is leaving retirees across the nation out to ‘dry.’

One of the main problems with the social security system is a lack of funds to pay out retirees for as long as they live. Back in 1940, right after the initial social security concerns began, the life expectancy of a 65-year-old was only 14 more years. Today–20 years. In the last few years, there has been a movement of the retirement age back to 67 for the next generation of workers (Shoffner). This is a necessary tactic because it forces working citizens to pay an extra year of social security taxes but decreases the amount of time they get the benefits for, being that they have to work an extra year before the benefits kick in. However, this extra year of paying benefits does not allow the government to collect enough money to make up for the extra years that people are living nowadays. Not only are people living longer, but there’s more of them. According to the United States Social Security Administration (SSA), by 2035, the number of Americans 65 and older will increase from about 50 million today to almost 80 million (“Fact”). Without an improvement in the social security system in the near future, the United States will not have enough money to provide retirees with the benefits they are entitled to through the end of their lives.

A second major problem with the social security system is the extreme dependency the future retired generation has on the program. There will be a steep increase in retirees over the next 20 years, putting more strain on the social security system. Currently, social security accounts for over one third of the income received by elderly; and of those that receive social security benefits, about half of them depend on these benefits for more than half their income (“Fact”). Because of the widespread need for social security benefits, workers are having to give up a larger portion of their income to pay retirees. The payments made by today’s working class citizens are not enough to cover the benefits for those that require them. For example, in 2017, the SSA estimates that about 62 million Americans will be paid out just under 1 trillion dollars in social security benefits. However, based on the current tax rates on the working class, only about $925 billion will be raised this year (“Fact”). The government does have some existing capital for the Social Security program, meaning they can buy some time until the program will turn into a deficit in 2022 (Davidson).

Today’s situation in the social security world is similar to that of the 1937 tax crisis. Back then, social security taxes were not actually going towards the social security program, therefore leaving retirees without full benefits, eventually leading to a partial economic collapse and severely increased tax rates for United States citizens, as shown by Knott’s cartoon. Without a movement to change the American social security system, especially by 2022, we could be looking at another economic downturn; one that would not only force people to retire at a later age, but also possibly create a tangled system like that described in the accompanying editorial to Knott’s cartoon in The Dallas Morning News.

In conclusion, it is clear that the priority of social security needs to be higher within the government programs. It is unfair that the age at which people retire depends on the government’s wealth, something that they have no control over. It is only right that with increased fees come increased benefits for all.

Works Cited

Davidson, Paul. “Social Security beneficiaries may get biggest raise in 6 years.” Usatoday.com, 13 July 2017, www.usatoday.com/story/money/personalfinance/retirement/2017/07/13/social-security-2018-benefits-rise-28-monthly/476968001/.

“Fact Sheet: Social Security.” Ssa.gov, www.ssa.gov/news/press/factsheets/basicfact-alt.pdf.

Shoffner, Kevin Whitman and Dave. “Social Security Administration.” The United States Social Security Administration, 1 Sept. 2011, www.ssa.gov/policy/docs/policybriefs/pb2011-02.html.

“Social Security.” Social Security Administration: How is Social Security financed?, www.ssa.gov/news/press/factsheets/HowAreSocialSecurity.htm.

Wright, Larry. “Social Security!” Cable.com, 2 Mar. 2004, www.cagle.com/news/socialsecurity/.