Social Security is being turned into a welfare system. This means that if your employer provides a pension system or if you are saving for your old age, you can kiss most Social Security benefits good-bye.

The Social Security tax currently takes 15 percent of wages and salaries up to an annual income of $46,500. Half is paid by the worker and half by the employer.However, economists regard the entire tax as paid by the worker, reasoning that the tax paid by the employer is simply part of the worker's compensation package.

In effect, by that reckoning, Social Security guarantees that your take-home pay is 15 percent less every year.

In the past, people accepted this high tax because when they retired they received a tax-free Social Security check. But that is being phased-out for people who have other retirement income.

In 1983, legislation was passed that broke the government's long-standing promise not to tax Social Security benefits.

Today, if you have a company pension which, together with your life's savings and half of your Social Security benefits, produces an annual retirement income of $25,000 ($32,000 for a couple), you have to pay tax on the other half of your Social Security benefits.

As inflation and economic growth push up pay and pensions, eventually everyone will have a $25,000 retirement income and pay tax on Social Security benefits.

Currently, some in government are trying to increase the taxable part of Social Security benefits to 85 percent. The next step would likely be to tax all of the benefits, and the final step could be to exclude people with above average income from receiving the benefits.

There seems to be a consensus that anyone who is prudent and hard-working enough to provide for his or her retirement should pay heavy Social Security taxes but should not expect to receive the benefits.

The self-same political crowd that is busily scolding Americans for not saving enough sees no unfairness in penalizing those who look after themselves.

The well-to-do are not materially affected by the scheme, except in principle. It is the thrifty, self-denying types who are going to be hurt. From now on they will have to carefully calculate their life savings to avoid being short-changed on their Social Security benefits.

When you hear politicians brag about how they have made Social Security financially sound, you now know how: They have no intention of letting anyone except the poor collect benefits in the future.

Unless you can save enough to break into the big time, the only way you can beat the game is to live high and retire in debt.

Ironically, it was conservative Ronald Reagan who presided over the 1983 transformation of Social Security into a welfare system. His budget director at that time, David Stockman, created the appearance of a massive deficit crisis. Taxing Social Security was part of the plan for dealing with the "crisis."

A National Commission on Social Security was set up to provide political cover, and much of the media looked the other way.

And most of those responsible for destroying the original concept of Social Security are prospering. They are Alan Greenspan, chairman of the Federal Reserve in Washington; Harvard professor Martin Feldstein; Democratic congressman Dan Rostenkowski; James Baker, secretary of state-designate under President-elect Bush, and longtime Baker aide Richard Darman, who'll be Bush's budget director.