Should union pensions be cut? Friday, June 6, 2014

[Brian]

The first thing to understand when it comes to SSA is there is no fund. Very simply it is just another tax. Half of it falls on an employer for the activity of having people in their employ and is measured by wages. They will pay this tax no matter what form of "money" they pay out.
Now for the employee things get a little more murky. The half of the tax that falls on the employee is a "special income tax" that is also measured by wages. Unfortunately the supreme court never espoused what exactly made it "special".

I have come to the conclusion that this "special" aspect is being paid in money not issued directly by the congress (bank credit / federal reserve credit are not issued via congressional money powers). The presumption is created when you give your SSN number to an employer that you want to participate in the SSA program and hence your wages are treated as taxable whether or not you actually created a taxable event by being paid in money substitutes.

I would suggest reading these two cases for more understanding:
Veazie Bank v. Fenno, 75 U.S. 533
http://caselaw.lp.findlaw.com/script...us/75/533.html

AND

Helvering v. Davis, 301 U.S. 619
http://caselaw.lp.findlaw.com/script...s/301/619.html