Tuesday, March 8, 2016

The crime of Social Security

"How this fund treats seniors in Minnesota is upside down from what it should be."

Years ago when I was paying into the Social Security fund, I would often go on a rant. I thought back then Social Security was a bad investment. Not a little bad investment, a huge bad investment. However, it was money that was going to pay my folks and other folks their age earned benefits. Even in the tender age of 40 something, I knew this Social Security gig was a Ponzi Scheme of historic proportions.

Now I am collecting from it. And so is my wife. And it is killing us from a tax perspective. If I had only known about this when I was working and paying into it, I would have been the biggest advocate in the state to have it changed. It is so bad right now, it is actually driving seniors out of this state. So few states tax this monthly check, that there is no provision to have state taxes withheld. So every April, the state income tax becomes a very painful experience for Minnesota seniors. 

Today the new legislative session starts in St. Paul. I have heard from many people that the fix for taxing social security as well as the fix for taxing retired veterans benefits is high on the agenda for the Republicans. Somebody on the radio this morning asked a very good question. What has taken this long to address this issue? Good question. Next question - Why is there any federal or state income tax on social security benefits? It certainly is not income. Then why income tax?

One final question and this one's a doozy. Why in the world is this a partisan issue? Should not the DFL be as interested as the Republicans are in getting this fixed? After all, it is not just the Republican seniors who are leaving the state. Many Democrat seniors are also.

The opening position of the Speaker for this issue should be as follows: Immediate cessation of taxing Social Security for Minnesota seniors. In addition, rebates for taxes paid on Social Security benefits going back up to five years. Most folks agree this should have never been taxed in the first place, so a up to five year rebate would somewhat right this wrong.

And as far as taxing veterans, that should have been fixed yesterday. This one is more of a slam dunk than the Social Security issue is. This is your chance to shine legislature. Let's go do this.

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