"The average citizen has been led to believe he and his employer are contributing to a fund and that some day he will call upon this, his own money, to carry him over his non-earning years," said Reagan. "But this isn't what Social Security representatives said before the United States Supreme Court. They stated that Social Security was not an insurance program and was not based on any actuarial standards. They stated that Social Security dues are a tax for the general use of the government, and the payment of that tax does not automatically entitle anyone to benefits. Benefit payments are a welfare program, which can be curtailed or cancelled anytime Congress should so decide."
This movie actor then predicted that younger Americans would eventually be taxed to cover Social Security's deficits and thus be deprived of earnings they could have put to better use themselves.
"And what of our sons -- the young man joining the workforce in the next few years?" said Reagan. "He will be taxed to try and catch up on the mounting deficit. If he could have his Social Security tax to invest in private insurance, it would provide for almost double the benefits provided by Social Security.
"This is not the only price we are paying in individual freedom," said Reagan. He went on to describe how federal subsidies and regulations would increase the power of Washington, D.C., over local public schools. "Federal aid is the foot in the door to federal control," he warned.
But the socialists' ultimate tool was the progressive tax. "A basic point to remember," Reagan said, "is that none of these extensions of socialism can be effected without money."
"Once we were told the income tax would never be greater than 2 percent, and that only from the rich," said Reagan. "In our lifetime, this law has grown from 31 to more than 440,000 words. We have received this progressive tax direct from Karl Marx, who designed it as the prime essential of a socialist state."
"There can be no moral justification of the progressive tax," he said.
Toward the end of his speech, Reagan told a story about testifying on tax reform in the House Ways and Means Committee. He discovered the committee was not interested in his ideas or those of many others who testified.
Later, Reagan said: "A handpicked group of predominantly campus economists appeared and talked of plugging loopholes to increase the government's tax revenue. Most of these so-called loopholes are the legitimate deductions without which the whole tax structure would have long since proved unworkable. The suggestions included disallowance of property taxes and interest on loans for income tax purposes and even the elimination of 100 percent deductions of charitable contributions."
"We have a tax machine that, in direct contravention of the Constitution, is not designed to solely raise revenue but is used, openly and admittedly, to control and direct the economy and to equalize the earnings of our people," said Reagan.
"Governments don't tax to get the money they need," he said. "Governments will always find a need for the money they get."
"Here is the main battleground!" declared the man who would become the greatest president of the 20th century. "We must reduce the government's supply of money and deny it the right to borrow."
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