Friday, April 06, 2012
If FICA is really just a "tax", there could be real issues soon with means testing and debt ceiling issues
One more argument regarding Social Security has been brought to my attention. I’ve been told that in the past, in the 1930s, it was defended legally as a “tax”, given the way Congress’s explicit powers are interpreted.
If it is a “tax” and not a “premium” related actuarially to an expected retirement benefit (including spousal benefit), then there is more legal justification for immediate means testing, should the idea come up again.
There could also exist more legal justification for withholding benefits should there be a future debt ceiling fight and should the government not have the ability to pay all its bills.
The “tax” argument, of course, came up during the first day of the health care hearings in front of the Supreme Court, in conjunction with the “Anti-Injunction” act. See my “Issues” blog.