The Treasury Inspector General for Tax Administration recently reported some facts on the Social Security programs for the fiscal year ended Sept. 30, 2014.
Total spending for Social Security benefits was $840,000,000,000 (that’s $840 billion). It is almost 25 percent of federal spending according to the Congressional Budget Office (CBO).
The Old-Age and Survivors Insurance recipients were 81 percent of all beneficiaries.
About 71 percent received retirement benefits, and 10 percent received survivors benefits. About 19 percent of the beneficiaries received Disability Insurance benefits.
The total OASI benefits paid was about 83 percent of all Social Security expenditures with 17 percent of all payments going to disability recipients for the fiscal year ended Sept. 30, 2014.
The report also explained the two primary sources of Social Security tax revenue were payroll taxes and income taxes on the retirement benefits. About 97 percent of the revenues reportedly came from payroll taxes.
The Congressional Budget Office predicts total spending on Social Security benefits will increase from about 3 percent of our Gross Domestic Product in 1999 to about 6 percent in 2029. That of course is expected mainly due to population aging.
I’m surprised the income tax revenues from the taxation of part of the Social Security benefits is not greater than reported. It does not take a lot of income to have at least part of the Social Security benefits to be subject to income tax. In 2014 if a single taxpayer had gross income of more than $25,000, some of the benefits were subject to income tax. For a married couple, filing a joint return, gross income of more than $32,000 causes part of the benefits to be taxable income.
I know a retired doctor that was hired to do some physical examinations to determine if the individual qualified as “disabled” for Social Security purposes. He indicated what I had understood, lots of folks have been found to be disabled and receive those payments.
If you haven’t heard, in 2014 the wages of up to $117,000 are subject to Social Security tax. Any wages above that are not subject to Social Security Tax. However, all wages are subject to Medicare tax.
Did you hear? “If all the pessimists of the past had been right in speaking of their society’s running out of creative possibilities, or going to ruin, civilization would indeed have ground to a halt long ago,” Sissela Bok, educator and writer.
John Bullis is a certified public accountant, personal financial specialist and certified senior adviser who has served Carson City for 45 years. He is founder emeritus of Bullis and Company CPAs.