How the Wealthy Rip Off the Social Security System

Nathan Newman points out that amid all the rhetoric on Social Security, the Bush Treasury Department yesterday admitted that the wealthy are regularly ripping off the system.

Specifically, Treasury's J. Russell George, who is the inspector general for tax administration, testified that high-income citizens were using the "S Corporation" designation to officially pay themselves low/no salaries to escape social security tax. They then declare all that income as "S Corporation" profit.

How much is this scam costing Americans? According to George, in the 2000 tax year, the owners of 36,000 single-shareholder 'S' corporations received no salaries at all despite each having operating profits of more than $100,000. As a result, there were no employment taxes paid on $13.2 billion in profits.

That's billions being stolen each year from the Social Security system as President Bush runs around the country saying we need to cut ordinary people's benefits. Then again, what do we expect? Bush, after all, let us know he has no interest in making people pay their fair share. As he said flippantly, trying to make people pay their fair share was wasted effort because "rich people figure out how to dodge taxes anyway."