March 28, 1983

To the Editor:

Manchester Evening Herald
10 Brainard Place
Manchester, CT 06040

Several yearsago, in a letter to the Editor of the Manchester Herald, I deploredthe "Triple Taxation" being imposed upon the citizens of Connecticut.To the already existing federal income and corporation taxes, theState of Connecticut was adding a tax on corporation dividends; inessence, imposing a second tax on a corporation's profits. The Stateat that time was also entertaining the idea of taxing the interest onour savings as well, but fortunately, this did not come about, andthey settled for taxing our capital gains instead.

Today, I amagain disturbed by the specter of "Quadruple Taxation", the fourthlayer of taxation being imposed upon our Social Security income, orupon our retirement income. Heretofore, our Social Security incomewas non-taxable and inviolate, except for the penalty imposed uponthose receiving Social Security income who continued to work betweenthe ages of 65 and 72 years and who exceeded the limitation income.After the age of 72, it was universally understood that our SocialSecurity income would provide an untouchable base upon which to builda sound retirement program composed of pension funds, savings andinterest from same, and dividends from our investments. In thismanner, through thrift and foresightedness, one could provide forone's "Golden Years". One never entertained the thought that changesin the Social Security laws would ever permit transfer of income fromretirees who saved for their old age and retirees who did not.

Paul CraigRoberts, former Assistant Treasury Secretary for Economic Policy, hasrecently called to our attention the inequity of the proposed tax onour Social Security income, noting that "Middle income retirees areabout to receive enormous increases in marginal tax rates on theirprivate pension and investment income, ranging from 50% to 77%, andin some special instances, over 100%." He further notes that "Anindividual retiree with 26,000 dollars in private retirement incomewill jump from a 30% marginal tax rate to a 45% rate, and a retireecouple, with a retirement income of 28,000 dollars will be pushedfrom a 28% to a 50% marginal tax rate. Social Security recipients whoare still working and have "earned income" in excess of the SocialSecurity earnings limitation, will face tax rates in excess of 100%.He points out that a retired couple with 36,000 dollars of incomewould be placed in the same marginal tax bracket as a working coupleearning 175,000 dollars!

The onerousproposal in the Social Security law which relates to us SeniorCitizens is that which would establish thresholds of income, andwould tax 50 cents of one's Social Security income for every dollarof private income above the threshold until one is paying tax onone-half of one's Social Security benefits. This results from raisingone's income tax bracket and revives the so-called "Bracket Creep"which accompanied yesterday's inflation. This legislation ismanifestly unfair, to all who made a sincere effort to provide forthemselves in their senior years, and will provide a greatdisincentive to do so in the future. It would deny the aged anyincentive whatsoever for being independent of the government andwould incline many to leave it all to Uncle Sam. We have heard muchfrom our representatives in government about discrimination againstrace, color and sex, but now, we are about to be discriminatedagainst based upon our age and where it hurts and affects us most,namely in our pocketbooks.

As a youngman, I was deeply influenced by Thomas Jefferson, his philosophy, andparticularly by his well-chosen words "I demand the right to beinsecure"; the right to succeed or fail, based, like Horatio Alger,upon one's own motivation and perspiration. This policy has notfailed me. Furthermore, I have always considered it a privilege topay any legitimate tax in return for the opportunity of living inthis land of free enterprise. I must confess that when SocialSecurity was first introduced, I opposed it for myself, as I did notconsider it a retirement program but merely a device to transferpayments from those working to those who were not. Physicians at theoutset of the program, like federal employees were free to remainoutside of the program and free to create their own retirementprograms. Later, however, this right was rescinded when Congressmandated that all self employed groups must join the system. Eventoday, Federal employees and other groups are actively resistingjoining this bankrupt program, Politicians today are applying bandaids to the system, and the one that is particularly hurtful to uselderly citizens is the one that taxes our Social Security income andthat of using our Social Security income to create a "Bracket Creep"to push us into higher tax brackets. It is unfair to discriminateagainst the elderly in this manner.

All SeniorCitizens who are caught up in this device should make their concernsand feelings known to their representatives in Congress and should doso promptly.

Very trulyyours,

Charles E. Jacobson Jr., M.D.

45 Wyllys St.

Manchester, CT