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Old 11-27-2007, 12:51 PM
mosdef mosdef is offline
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Join Date: Jan 2005
Location: Toronto
Posts: 3,414
Default Re: Understanding the Social Security scam

[ QUOTE ]
Let's say you make 46k
They tax you 7k and call it Social Security tax.
The 7k goes into a pot with everything else they collect.
When you retire, they go back and calculate your benefit based on the fact that you earned 46k, NOT that you paid 7k.

[/ QUOTE ]

I still disagree with you on this. The fact that the 7K is not referenced directly does not mean that the benefits are not linked to contributions.

Consider for example the following 2 pension plans:

Plan A: You pay 2% of pay into the pension fund and on retirement you receive a benefit equal to 1% of your total pay over your career.

Plan B: You pay 2% of pay into the pension fund and on retirement you receive a benefit equal to 50% of your total contributions to the plan.

Based on your logic, one of these plans has benefits linked to earnings and one does not. But they are the same plan.
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