The History of Social Security Tax
The government deducts Social Security tax from workers' paychecks. This money goes to sponsoring Medicare and the Social Security program. In 2010, the tax rate is 6.2 percent for Old-Age, Survivors and Disability Insurance and 1.45 percent for Hospital Insurance. These rates double for self-employed individuals.
Other People Are Reading
-
Creation
-
April 5, 1935, started the House of Representatives debate on Social Security. After two weeks of debate, the House passed the bill with 372 yes votes and only 33 no votes. The Senate picked up the bill on May 20, 1935, and after nearly a month passed the measure 77 to 6. President Franklin Roosevelt signed the Social Security Act on Aug., 14, 1935, and the taxes were first collected during January 1937.
Origin of the Name
-
The American Association for Social Security, formed by author and social reformer Abraham Epstein, coined the term social security in the United States. The American Association for Social Security set up many events to help bring about passage of a law dedicated to providing old-age pensions, unemployment and health insurance for Americans. Due to the dedication on the subject from Epstein's group, during Congressional consideration the name of the bill was changed from the Economic Security Act to the Social Security Act of 1935.
-
Original Coverage
-
Originally, the Social Security tax was collected only from commerce and industry employees. Since then, it has been extended to almost every worker, although it was not until 1984 that members of Congress needed to pay the Social Security tax.
Medicare
-
People were able to use Medicare starting July 1, 1966. This was after Congress passed Medicare on July 30, 1965. President Lyndon B. Johnson was president of the United States when the bill passed. Congress highly debated the Medicare bill, but in the end the Senate passed Medicare with 68 yes votes to only 21 no votes and the House of Representatives OK'd it by a margin of 313 to 115.
Original Recipient
-
The first lump-sum recipient of Social Security was Ernest Ackerman. The retired Cleveland motorman received 17 cents during January 1937. Ida May Fuller of Ludlow, Vermont, was the first to receive monthly benefits. Her first check, received in January 1940, was for $22.54.
-
References
Resources
- Photo Credit sharing a cup of coffee image by Peter Baxter from Fotolia.com
