Tax imposed on employers and employees to fund the Social Security system

The Federal Insurance Contributions Act (FICA) is a United States federal payroll (or employment) contribution directed towards both employees and employers to fund Social Security and Medicare—federal programs that provide benefits for retirees, people with disabilities and children of deceased workers.

Web Sites

Project on Social Security Choice
"[Launched on] August 14, 1995 [by] the Cato Institute ... The objective of the project is to formulate a viable blueprint allowing individuals the opportunity of owning their own retirement account."


Don't Privatize Plunder, by Anthony Gregory, 22 Sep 2004
"That's three fourths of every typical worker's Monday, spent working for a fraudulent system inherited from Otto von Bismarck. ... Social Security is 'regressive,' in that the poor pay proportionately more, or, at least, more than the super rich, whose payroll taxes are capped at a certain amount. ..."
Ending Social Security: Part 1, by Michael S. Rozeff, 10 Aug 2006
"Uncle Sam is a terrible and fraudulent investment advisor who has done the American public a huge disservice by forcing them into this poor investment, making them believe that money was invested in assets, and counseling and assuring them that Social Security would always be there for them. Uncle Sam can't keep this promise except by continual theft from new workers."
Ending Social Security: Part 2, by Michael S. Rozeff, 11 Aug 2006
"Two types of termination are discussed below. One is an end to the program in which it stops taxing payers and also stops paying benefits. As impolitic and extreme as this may seem, thinking about it is useful because it shows us that even this course is feasible and we see what is involved in a less radical phasing out."
George W. Bush's Nixonomics, by Gregory Bresiger, Mises Daily, 22 May 2006
Describes the various fiscal, monetary and economic policies during the Nixon presidency and compares them to those under George W. Bush
"These wage and price controls went along with another series of measures that included the expansion of Social Security — in time for the increased payment notices to go out to recipients just before the election — without any projection of what it would cost ... Nixon's celebrated Social Security expansion included a cola provision without serious consideration of the long-term effects ... These generations of taxpayers will likely curse the government's faulty accounting techniques just as tens of millions of Americans of modest means pay higher payroll taxes than income taxes."
How We Privatized Social Security in Chile, by José Piñera, The Freeman, Jul 1997
Explains how the Chilean private pension system works and how the previous government-controlled system was transformed into the current one (the author was the Secretary of Labor and Social Security under Pinochet and designed the new system)
"First, we continued paying the elderly who had become dependent on the government-run system. ... Second, we offered every worker the freedom to stay in the government-run system at his own risk. ... Third, we required new entrants to the labor force to join the pension savings account system, because we believed it was irresponsible to go on burdening our children and grandchildren with an unfunded debt."
Interview with Gary Becker, by Gary Becker, The Region, Jun 2002
Topics include the economics of crime, economics and law, banking discrimination, economic education, social security, behavioral economics, sociology, career choices and moral hazards
"The present Social Security system is a mixture of an annuity and redistribution system. The redistribution system discourages many people from working at older ages when they are healthy enough and would want to continue working. Social Security gives them an incentive not to work because they are taxed so heavily on their earnings. It is really incredible, given that work is now much less physically demanding, and people are much more mentally and physically stronger than they used to be. ... It is a tax because workers do not get back dollar for dollar what they put in. They get back around 30 cents on each dollar they put in."
Lies and Leviathan, by James Bovard, Future of Freedom, Aug 2006
Describes the deceit used to institute and expand the U.S. Social Security program, as well as various other government programs and officials
"Social Security is the single largest government aid program and the big lie of domestic politics. From the start, the Roosevelt administration deceived Americans about the nature of the program. People were endlessly told that it was an insurance program that would give them vested rights akin to a private contract."
Related Topic: Government
Morality and Social Security, by Robert Sirico, Future of Freedom, Dec 1999
Discusses the effect of the U.S. Social Security program from an ethical and social standpoint
"Is it right that the young be taxed to enable the government to provide a generous retirement program for able-bodied older people? ... Just as parents care for their young now, it was once well understood that the middle-aged have a moral responsibility to care for their aging parents. This establishes a social link between the generations, an interdependency which is essential for the continuity of values and habits of a mature people. Social Security has gone a long way toward severing those ties, freeing people from the responsibility to care for their own parents. It also reduces the incentive to have children ..."
Related Topic: Government
Reform Social Security ... or Repeal It?, by Jacob Hornberger, Future of Freedom, Jul 2000
"What would happen if Social Security were repealed? Many retired people would get along fine because they don't need the money. ... For the first 150 years ... the American people rejected Social Security ... believing that individuals should be free to make their own choices in life and having faith that most people care about others."
Social Security Has to Go, by Sheldon Richman, Future of Freedom, Jan 1998
Examines the U.S. Social Security system, including the employee and employer "contributions", the "trust fund" and how it may fare in the future
"Each pay period, workers are forced make what are called 'contributions,' and when they retire, they are to receive benefits. The system is riddled with dishonesty. First of all, when the government forces a citizen to make a contribution, it's a tax and nothing else. Second, the money is not put away or invested in order to earn interest and yield benefits for retirement later on. From the beginning, the money was used to pay benefits to current retirees."
Taxation Is Robbery, by Frank Chodorov, Out of Step, 1962
Chapter XXII; starting with the historical origins of taxation, proceeds to examine its indirect and direct forms and the rationales behind it
"Social security taxation is nothing but a tax on wages, in its entirety, and was deliberately and maliciously misnamed. Even the part which is 'contributed' by the employer is ultimately paid by the worker ... The revenue from social security taxes is not set aside for the payment of social 'benefits,' but is thrown into the general tax fund, subject to any appropriation, and when an old-age pit­tance is ultimately allowed it is paid out of the then cur­rent tax collections."
The Coming Financial Collapse of Social Security, by Peter J. Ferrara, The Freeman, Nov 1993
"Social Security ... fundamentally operates on a pay-as-you-go basis. The tax payments of current taxpayers are not saved and invested to finance their own future benefits. Rather, most current tax payments are immediately paid out to finance the benefits for current retirees."
The Immorality of Social Security, by John Attarian, The Freeman, Jan 1995
"Understanding Social Security doesn't tell them about Flemming v. Nestor, the 1960 Supreme Court decision by which the wife of a deported Communist lost her benefits, even though her husband had paid Social Security taxes. ... it will be vital that the public realize just how morally flawed Social Security really is."
The Invisible Hand Is a Gentle Hand, by Sharon Harris, 14 Sep 1998
Defends the free market and individual liberty, quoting among others Frédéric Bastiat, Thomas Jefferson, David and Milton Friedman, John Lott, Isabel Paterson, Pierre-Joseph Proudhon, Adam Smith, Thomas Sowell, John Stossel and Walter Williams
"Let's look at Social Security. You get a little of your money back. When you die, it disappears. In a free market, you would have the opportunity to retire better off than you are while you're working. Even if you're a minimum wage-earner. Economist and author Robert Genetski did the math. In his book, he showed how privatizing Social Security and government schools, along with a reduction in government regulations, would add at least $5,000 annually to the income of even the lowest-paid workers. What does that mean? Using conservative assumptions, virtually everyone could retire with $1 million or more!"
The Repeal of Social Security, by Jacob Hornberger, Future of Freedom, Nov 1995
"... the proponents of control, central planning, and socialism ... can never overcome one basic moral principle: Stealing is stealing, regardless of the label placed upon it. ... the advocate of liberty must not assist the advocate of socialism with "free-market proposals" to save socialism."
The Social Security Fraud, by Sheldon Richman, Future of Freedom, Sep 2001
Discusses comments made by Treasury Secretary Paul O'Neill indicating that the Social Security Trust Fund has no tangible assets
"O'Neill is right. The Trust Fund is a figment of our collective imagination. ... Every cent that the American people pay in FICA payroll taxes is immediately spent. Anything left over after the current retirees are paid off goes into the general treasury where it is used, first, to make up any operating shortfall, and then to pay the government's creditors. The Social Security Trust Fund is credited for that money in the form of nonnegotiable bonds that purportedly earn interest."
Track Work, by Jacob Sullum, Reason, 19 Jun 2001
"Social Security, which forces relatively poor workers to subsidize relatively affluent retirees, is not a fair system, and any attempt to fix it--or, better yet, dismantle it--will not be entirely fair either. Yet we need to start talking about how the suffering should be distributed."
Uncle Sam's Retirement Scam, by Doug Bandow, The Freeman, Jan 2002
Examines alternatives to deal with funding the Social Security "Ponzi scheme", from raising FICA taxes, using general tax revenues, reducing benefits, engaging in an "orgy of borrowing" or allowing people to invest privately
"Social Security was long viewed as America's most successful social program. But it worked only because of demographics: when first created, dozens of workers supported each worker. Taxes were low, benefits secure. But Ponzi schemes succeed for only a limited time. When Franklin Roosevelt was posing as the savior of the elderly, almost half the people died before collecting their first check. No longer, however. Most people receive not just the first check, but many more ... as the Baby Boom bulge hits retirement in the coming years, every retiree will become dependent on just two workers, down from three today."
Related Topic: Taxation

Cartoons and Comic Strips

All right, Madoff! Where did you get the idea ..., by Gary Varvel, The Indianapolis Star, 18 Dec 2008
... and I also believe that with a few little adjustments, Social Security will ..., by Chuck Asay, 18 Aug 2005
Two for One, by Chip Bok, 22 Feb 2005

The introductory paragraph uses material from the Wikipedia article "Federal Insurance Contributions Act tax" as of 19 Nov 2018, which is released under the Creative Commons Attribution-Share-Alike License 3.0.