Social Security

Social Security

Social Security is one of the centerpieces of America's social safety net. It was created in 1935 by the Social Security Act (unemployment insurance and welfare were also instituted by this law).  Social Security is a federally administered and funded insurance program to alleviate poverty among the elderly. Social Security functions as a contributory system wherein workers and their employers contribute taxes to the program throughout their working lives, and are then able to utilize the fund upon retirement. The Social Security Act has been expanded and amended over the years.

Commentary

Lessons from FDR: When the Right Cries Wolf, Bite Back

August 14, 2010

Cry Wolf Quotes

The Social Security Bill will add 6 percent to the labor cost of doing business. No one with the slightest familiarity with economic principals can believe that the total cost of this will be born solely by employers; it must be shared by labor and consumers.

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Editorial, The New York Times.

The actual fact will be, in almost every case, that the whole tax will be borne either by the employe [sic] or by the consumer through higher prices. That is the history of all such taxes. This is because the tax is imposed in such a way that, if the employer is to stay in business, he must shift the tax to some one else.

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Alf Landon, the 1936 Republican nominee for president.

We believe that this measure, if adopted, means at best an annuity of doubtful value for the aged of the future and unemployment benefit of doubtful value for the normally temporarily unemployed of the future--at the terrific cost of retarding the reemployment of those who are unemployed today.

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John Harrington, general counsel for the Illinois Manufacturing Association. Senate Finance Committee hearings.

Unfortunately, the measure is in some respects ill-considered. It’s constitutionality is by no means certain: if the Federal Government may compel the states to adopt unemployment insurance under the guise of a tax, why may it not similarly compel them to adopt any other sort of legislation

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Editorial, The New York Times.

Related Laws and Rules

Resources

Center for Economic and Policy Research (CEPR) is a progressive think tank that concentrates on social and economic policy, both domestic and international.

The Center on Budget and Policy Priorities (CBPP) is a think tank focused on tax and fiscal policy. They provide in-depth analysis of state issues.