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§( the «id of • quirtlr M<* toUl undtpwlttd .Ultiirt Itl* thin

No dtpotlt rt-qulnd. Piy oil-•net dlrtctly to th« lnttm»l Rtvtnu* Slrvlc* with your quirtirly raturn, of mika a dtpoilt If you prtftr.

2. If it lh« *nd of • qutrttr Ih* toUl undtpotlttd jikm *r* $200 or

more

On or btfort Utt day of nut month. If $2,000 or more, M«rul*4.

3. If at tht and of any month (•«• ciptthfttit month of • quirtir), cu-mulitlvt undtpo*-lt*d Urn, for tht quirtar ar* $200 or mor*. but I*M thw $2.000:

Within IS diyi aftir ind of month. (For tht flr»t 2 month* of th*qu*r-ttr no dopodt li raqulrtd If you pra-vloutly mid* * de­posit tor * quar. tar-monthly ptrlod thlt occurrtd dur­ing tht month un-dtr tht $2,000 ml* In K*m 4, b*low.)

4, If it tht *nd Of iny quartar-monthly ptrlod. cu­mulative undtpo*-tod Jutltor tht quwMr an $2,000 or mora:

Within 3 tanking dtyf iftar tht quar-tar-monthly ptrlod

19. Using Government Depositories

How to DtpoiH Tasa».—Fill In • pro InKribed Federal Tax Deposit Form SOI or Form 500, depending on the type of tax you are depositing, according to Instructions.

Send aach Federal tax deposit form and • single payment covering the taxes to be deposited to any commercial bank qualified as a depository for Federal taxes, or to a Federal Reserve bank. Make checks or money orders payable to the bank where you make your tax deposit. Contact your local bank or Fed­eral Reserve bank for the names of authorized commercial bank deposi­tories.

The timeliness of deposits Is deter­mined by the date the bank receives them. A deposit received by the bank after the due date will be considered timely H you establish that you mailed H 2 or more days before the due date.

How to Obtain Federal Tax Deposit

Forms.—The Service will automatically send you pre-lnscribed Federal tax de­posit forms after you apply for an Identi­fication number. If you need additional forms, order them from the Internal Revenue Service Center where you file. Be sure to show your name, employer identification number, address, periods for which the forms are needed, and type of tax. Request forms early.

If your branch offices make tax de­posits, obtain a supply of Federal tax deposit forms and distribute them to the branches so they can make deposits when due.

Do not use another employer's pro-Inscribed forms. If you have not re­ceived Federal tax deposit forms by a deposit due date, mail your payment to the Internal Revenue Service Center where you file your return. Make It pay­able to the Internal Revenue Service and show on It your name, Identification number, address, kind of tax, and pe­riod covered.

Deposit Record.—Before making a deposit, enter the payment amount on the form and stub, and record the check or money order number and date. Keep' the stub for your records. The Service will not return the deposit portion of this form to you, but will use it to credit your tax account by means of your em­ployer identification number.

How to Claim Credit for Overpay­ments.—If you deposited more than the correct amount of taxes for a quarter, you may elect to have the overpeyment refunded, or applied as a credit to your next return. Show the appropriate

for that year, while the total unfunded liabilities of the Social Security System was nearly five times greater (even using the government's own understated figures) than the entire reported national debt! This, therefore, hardly qualifies as a program that is "soundly financed both for the short-range and the long-range future." Social Security obligations are not "financed" at all, as the pamphlet unabashedly claims.

Figure 24 is a reproduction of pages 22 and 23 of HEW pamphlet 75-10035 issued November 1974 and entitled "Your Social Security." These two pages con­tain no less than thirty-one misstatements of fact and/or misleading inferences regarding Social Security.

The many misstatements in the three Social Secur­ity pamphlets cited are good examples of how the gov­ernment and the Social Security Administration have deliberately misled the American public regarding So­cial Security's solvency and character.

To that extent, these pamphlets are blatant viola­tions of Section 1001, Title 18, of the U.S. criminal code, a section I cited earlier. The statement in pamphlet 73-10033 that "the latest report shows the program [Social Security] is soundly financed both for the short-range and long-range future" is so blantantly false, given the Treasury Department's report of June 30, 1973, that those who approved this pamphlet should receive diciplinary action immediately. And, of course, both "Your Medicare Handbook" and "Your Social Security" are fraught with statements that are false, fictitious, and fraudulent.

What Are "Social Forms of Insurance"?

When government actuaries and bureaucrats find themselves trapped by intelligent questions about So-

Figure 23

Kinds of work covered

over % the combined employee-

Almost every kind of employment

employer rate for retirement, sur-

and self-employment is covered by

vivors, and disability insurance.

social security. Some occupations

The hospital insurance contribu-

and some kinds of earnings, how-

tion rate is the same for employers,

ever, are affected by special

employees, and self-employed

provisions of the law.

persons.

If the kind of work you do is

The maximum amount of yearly

listed below and ^ou aren't sure if

earnings that can count for social

you arc earning protection under

security and on which you pay

social security, you may want to

social security contributions is

ask someone at your social security

$13,200 for 1974. The maximum

office for information on these

will increase automatically in later

special provisions:

years to keep pace with increases

V

in average earnings.

Family employment — work done

The maximum in past years

by a child under 21 for a parent,

was: $3,000 a year for 1937-50;

work done by a spouse, or work

$3,600 for 195 1-54; $4,200 for

done by a parent in the home of a

1955-58: $4,800 for 1959-65;

child;

$6,600 for 1966-67; $7,800 for

V

1968-71; $9,000 for 1972; and

Work in or about the private home

$10,800 for 1973.

of your employer;

People now making social

V

security contributions cun be sure

Student employment at a school

that funds will be available to pay

or college;

their benefits when they become

V

eligible. The schedule of contribu-

Farm work; or

tion rates now in the law will

V

provide income sufficient to pay all

Employment in a job where you

benefits under present law us well

get cash tips.

as administrative costs of the pro-




gram now and into the future.

Financing social security

Financing of social security is

Social security retirement, sur-

examined each year by the Boards

vivors, and disability benefits and

of Trustees of the trust funds. I he

hospital insurance benefits are

latest report shows that the

paid for by contributions based on

program is soundly financed both

covered earnings.

tor the short-range and long-range

If you are employed, the con-

future.

tributions are deducted from your




salary, and your employer pays an




equal amount; if you arc self-em-




ployed, you contribute at a little




Figure 24

Financing

The basic Idea

The basic idea of social security is a simple one: During working yean employees, (heir employers, and self-employed people pay social security contributions into spe­cial trust funds. When earnings stop or are reduced because the worker retires, be­comes disabled, or dies, monthly cash bene­fits are paid to replace part of the earnings the family has lost

Part of the contributions made go into a separate hospital insurance trust fund so workers and their dependents will have help in paying their hospital bills when they become eligible for Medicare. The medical insurance part of Medicare is financed by premiums paid by the people who have enrolled for this protection and amounts contributed by the Federal Government.

Contribution rttes

If you're employed, you and your employer each pay an rqual share of social security contributions. If you're self-employed, you pay contributions for retirement, survivors, and disability insurance at a somewhat lower rate than the combined rate for an employee and his employer. The hospital insurance contribution rate is the same for the employer, the employee, and the self-employed person.

As long as you have earnings that are covered by the law, you continue to pay contributions rgardless of your age and even if you are receiving social security benefits.

Through 1977 employees and employers each pay 5.85 percent on the employee's wages. The total rate for self-employed people is 7.90 percent. The rates include

.90 percent for hospital insurance under Medicare. The maximum amount of earn­ings that can count for social security purposes and on which you pay social security contributions is $14,100 in 1975.

Future rate increases are scheduled. In 1978 the employee and employer will each pay 6.05 percent. The rate for each will go to 6.30 percent in 1981 and 6.45 percent in 1986. The self-employed rate goes to 8.10 percent in 1978; to 8.35 percent in 1981; and to 8.50 percent in 1986. The hospital insurance part of the rate will be 1.10 percent in 1978; 1.35 percent in 1981; and 1.50 percent in 1986.

Funds not required for current benefit payments and expenses are invested in interest-bearing U.S. Government securities.

The Government's share of the cost for supplementary medical insurance and certain other social security costs come from general revenues of the U.S. Treasury, not from social security contributions.

How contributions art paid

If you're employed, your contribution is deducted from your wages each payday. Your employer matches your payment and sends the combined amount to the Internal Revenue Service.

If you're self-employed and your net earnings are $400 or more in a year, you must report your earnings and pay your self-employment contribution each year when you file your individual income tax return. This is true even if you owe no income tax.

Your wages and self-employment income are entered on your social security record throughout your working years. This record of your earnings will be used to determine

cial Security's deficiencies, they try to evade the fact that Social Security is a Ponzi-like scheme by replying, "but Social Security is a social form of insurance and, as such, it is not susceptible to the same type of measure­ment and actuarial standards as private forms of insur­ance". Such assertions are absurd. Either something is insurance or it isn't.

What are "social forms of insurance," if they are not insurance? They are simply forms of "socialism" (see Chapter 6,3 for discussion on socialism). "Social forms of insurance" is socialism sold to the public as an adjunct of the free-enterprise system, since its propo­nents use capitalistic terms, such as insurance, re­serves, funding, and premiums, which are non-existant in a socialistic lexicon. "Social forms of insurance" is actually a cryptosocialistic term; it promotes socialism under the guise and within the framework of the free-enterprise system.

How Social Security Lowers America's Standard of Living

One of the tragedies of Social Security is that it has helped (and helps) to lower the American standard of living. One reason for this is that Social Security has spawned a large, nonproductive class of bureaucrats whose sole function is to service this vast system, while at the same time imposing uneconomic and unneces­sary collection and record-keeping burdens on Amer­ican industry.

I often wonder how many American businesses that are now forced to close their doors (thus creating unemployment and social insecurity) would remain

8 Refers to Chapter 6 of The Biggest Con.

open if only they had as working capital the money they had paid into Social Security during the last five years.

Another tragedy in connection with Social Secur­ity is that the government has convinced vast segments of the public that the System will be able to provide them with significant income during their later years. This, of course, will not be possible. An objective analy­sis of the assets and liabilities of the System, together with the growth rate of these liabilities, plus the declin­ing growth rate and the declining productive base of the economy (in large measure due to the economy being saddled with such inane government programs and burdensome taxes) will point toward the System's col­lapse. The only question is when? Therefore, many will be without the income they had expected. Had Social Security "contributions" not been compulsory, the money could have been invested elsewhere in the pri­vate sector. Substantial capital, in this way, would have been channeled into the private sector, increasing the country's industrial base, and creating more jobs and goods — in sum, generating real growth. Instead, this capital was channeled to Washington where it was largely dissipated by politicians and bureaucrats.

Perhaps the greatest tragedy of the Social Security System is that each month over 30 million recipients4 of Social Security are told that if they earn more than a stated sum, they will lose part if not all of their benefits. How many millions of these recipients might, in fact, be capable and willing to work if only they were not dis­couraged and penalized from doing so by government? A nation's standard of living is determined by the total economic output of its citizens. If fewer people work,

4 To recipients under 16, such prohibitions are, I grant, immaterial.

then the lower the nation's productivity and its stan­dard of living become. Thus, since Social Security actually encourages, even compels, nonproductivity by a vast segment of the population, it is forcing a substan­tially lower standard of living on the entire nation.

Appendix B

(Pages 302-304, The

Biggest Con)

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