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Social Security

January 13, 1994

* Robert Kurtz's letter (Dec. 29) suggests he was either misinformed or he misunderstood how taxes on Social Security benefits are appropriated. Income taxes on Social Security benefits are deposited into the Social Security retirement and survivors (OASI) trust fund.

Taxation of Social Security benefits for some recipients will increase from 50% to 85% after 1993. Taxes on the increase (35%) are deposited into the Medicare trust fund which, combined with the 1.45% Social Security tax (FICA), pays for hospital benefits under Medicare. Treatment of taxes resulting from the initial 50% will not change after 1993--these taxes will continue to be deposited into the OASI trust fund.

WANDA H. WALDMAN

District Manager

Social Security Administration

Santa Ana

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