Is Social Security Socialism – is social security a form of socialism, When it comes to the ‘Socialism’ word, it is a burdened word in the US. The United States is a country, in which capitalism is the predominant economic system and is also known as the base for the government’s system. There are different situations, where American people seek government-based programs. One of the most popular government programs is Social Security, which is mostly looked at by people in the USA.
If you want to realize what the debate is about, you need to look at a number of terms. If we talk about socialism in US, the government is the sole responsible to own and leverage major industries instead of businesses or persons.
Is Social Security Socialism?
Is Social Security a Socialist Program?
In addition, the economy is also planned according to the central government. As a result, it can be said that the government is considered the main benefactor of goods and services for people living there. On the other hand, if we consider capitalism, capital goods are possessed by private businesses or persons and here, the market leverages the entire economy.
Due to the capitalism in the USA, Social Security is one of the trademarks of its government unit. It is a program, which is run by the government and introduced in 1935. Whether or not the SS may be considered as a type of socialism, needs to be clear out. So, start reading further:
Must Read: Social Security Guide
The king of the SS!
From this thing, it implies who runs the SS system. Rather than giving power to businesses or individuals, it is the duty of the government to run it. It states that the government is the king of social security. The government has the accountability to control the website of Social Security, where people come to check the record of their benefits.
The website also shows people whether their retirement benefit applications have been approved or not. You can also collect the taxes related to Social Security and also allocate retirement benefits.
It is a true fact that the government gives this responsibility to other organizations.
It states that they hire some independent contractors to give control of the data storage, telecommunications, and other services to the government. social security is socialism
Who takes the decision on the contribution amount and when to be contributed?
It has been decided by the government how much of an individual’s paycheck is taxed to donate to the fund of Social Security. There are different rules for different categories of people. For a glance, in the year of 2016, 6.2 percent of the gross pay of a person went to SS, and the employer jerked in an equal account.
But if a person earns more than $118500, then there is no need to disburse taxes of the Social Security on any paychecks above that amount. In any case of self-employment, a person pays the entire 12.4%, but the amount is decreased slightly when he or she takes a tax deduction for the employer’s part of that tax.
There is nothing irrational in considering whether, even if a person is not self-employed, he or she is effectively paying the entire 12.4 percent, bearing the tax’s incidence. The reason is that if the employer did not need to make SS paychecks on a person’s behalf, it could rather involve that money in his or her earnings.
‘When to contribute’ is also decided by the government. In case of an employee, the taxes are acquired out of each salary. When it comes to self-employment, a person pays when he or she files the annual tax return.
Persons who have private retirement savings accounts have an enhanced level of control over the amount and the time of the contribution than they do with disbursing taxes of Social Security.
Let’s see the example if a person is employed in a company that provides a 401(k) plan, then he or she can take a decision of what percentage of every salary to forward to that account, even though the regulations of the government put some restrictions on the amount of money a person can contribute.
In the year 2016, the 401(k) contribution limit was $18,000, except for a person who was 50 or older. In that situation, a person was permitted to donate up to 6000 dollars or more, for a total sum of 24000 dollars.
In addition, a person could not donate to a Roth IRA, if the adjusted gross salary is extended to 132000 dollars in the case of a single person and 194000 dollars if the person is married and he or she is filing the application on a combined basis.
Must Read: Social Security Benefits: Three Major Categories Described!
Can anyone withdraw?
There are a few taxpayers, who can exempt themselves from paying into the SS system. Groups like The Amish, Mennonites, and a number of other religious groups can sometimes an exemption from getting involved in this system due to their religion, as long as they also don’t qualify to receive, or receive, any SS benefits from it. In any case, if a person has received any SS benefits, then he or she may still be eligible for a religious exemption if they repay them.
A person, who renounces his or her US citizenship, can withdraw. Of course, some non-resident people do not need to get into this system, according to the type of visa they own. Other categories who can enjoy the exemption include foreign government employees residing in US, and also the college students having employment by their university.
The Process of Managing the Money
There is one collective pot, where all of the SS contributions go in. the setup of the system has been done in the form of an intergenerational wealth transfer- the SS taxes. Of course, the government gathers from current employees pay for SS benefits of people, who have currently retired.
Based on when a person retires, how much he or she earned, and the marital status they have, a person may get a return according to the investment and the contributions. This is why most people apprehend the benefits of SS and want to opt for it.