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Goofyhoofy,

The taxation of Social Security is not a "social security" issue, it is a taxation issue. We tax capital gains at different rates, too. Does that make them a "welfare program"? I have some tax-free muni-bonds. Are they a "welfare program?"

Well, it is both a social security and a taxation issue.

Other income usually uses a progressive taxation structure, but social security income does not. The regressive way SS income is taxed is clearly intended to take away some of the benefits for people who have other income and presumably don't need the full benefits.

The other thing is that SS taxes are not deductible for the purpose of other income taxes (federal, state, local). Therefore your employee SS premiums have already been taxed. I'm not sure how part of the SS benefits are still allowed to be taxed.
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