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Aughie and Nia start the regular season of episodes with a discussion of how the government used to assign Social Security Numbers and Employer Identification Numbers.
This podcast uses government documents to illuminate the workings of the American government, and offer context around the effects of government agencies in your everyday life.
N. Rodgers: Hey, Aughie.
J. Aughenbaugh: Good morning, Nia. How are you?
N. Rodgers: I'm excellent. How are you?
J. Aughenbaugh: I'm good. In fact, the reason why I'm so good, and I'll leave it to the listeners to determine how good. But one of the reasons why I'm still good is we're starting a brand new season of the podcast.
N. Rodgers: We are. We're starting Season 12.
J. Aughenbaugh: Well, done. Yes.
N. Rodgers: That's exciting for us, because I don't know if you recall when we started this. I think we thought at the beginning we do probably three seasons and then some adult somewhere would tell us that we have to stop. I seem to recall us having a discussion about whether the adults in our lives, the bosses, would let this go on. But seemingly, either we're under their radar so far that they don't know it's going on and actually now they're starting to say, "Hey, don't you want to expand your brand? Don't you want to?"
J. Aughenbaugh: Yeah.
N. Rodgers: I'm waiting for the day when they ask me if we want merchandise. Because we have so many great ideas.
J. Aughenbaugh: Yeah. The list of merch possibilities here, at least in our minds, is endless. But Nia, before we get to today's podcast episode, I want to thank our long-term listeners because Nia, how many downloads have we had so far?
N. Rodgers: It's ever 10,000. I think it's over 12,000 now.
J. Aughenbaugh: Nia and I don't take this for granted, folks. The fact that many of you guys, on a very regular basis, are willing to download the podcast and listen to us. For lack of a better phrase, get our geek on about government documents, political phenomenon, etc. That makes us feel really good, and thank you guys very much.
N. Rodgers: Yes. We're very happy that we have regular listeners and we have new listeners who had us. But also, we're just a little podcast of two groups who enjoy talking about all goofy stuff, most of which has to do with the Federal Government and most of which has to do with Federal Government documents.
J. Aughenbaugh: Yes.
N. Rodgers: We're going to talk today about at least one document that almost everybody has either in their wallet or, more likely, at their mom's house in a safe place. That is your Social Security Card.
J. Aughenbaugh: Yeah.
N. Rodgers: What happened was a few weeks ago, I said to Aughie, hey, what do you think about doing an episode about numbers? And Aughie was like, "Tell me more.'' Because Aughie is smart and doesn't commit without knowing what the heck I'm talking about. I was, how the government assigns a Social Security Number. I thought that that would be an easy peasy thing for him. He went down a rabbit hole so far that we're lucky that he's back out and able to record. Because that's a whole thing. I want to just phenomenally recognized that before 1936 we didn't give people numbers.
J. Aughenbaugh: No.
N. Rodgers: We just saw, we did not number the people who live now. We did count them in the census. We have census is for way back before then, 100 years before that. But we didn't actually assign people a number. Now you cannot function without it.
J. Aughenbaugh: Nia, if you will, distribution of Social Security numbers. I mean, numbers was a huge debate in the country as to whether or not the government should have the authority to assign people numbers because folks were concerned that this would be a way for the government to track and surveil you.
N. Rodgers: In 1936, they were worried about that.
J. Aughenbaugh: Yeah.
N. Rodgers: Can I just say that 2023 is like, excuse me, hold my beer. I wanted to talk to you about surveillance. But then again, a lot of people now have handed that over to the government by doing things like using smartphones and having bank accounts, and doing the other things that we do to make life easier. But I have friends who Venmo everything and I'm, oh, well then you're easily tracked by the government, right?
J. Aughenbaugh: Yeah.
N. Rodgers: Now the IRS has changed the rules where I think they're going to tax, they're going to do something with Venmo amounts. You have to report them to the government.
J. Aughenbaugh: Yeah, because the government has concluded that there is perhaps a lot of illegal activity going on.
N. Rodgers: Or a lot of side gigs where people pay through Venmo.
J. Aughenbaugh: Yes.
N. Rodgers: They want to try to collect the tax money owed on that? The income tax.
J. Aughenbaugh: Yeah, the income tax. It was pretty fascinating to me and I knew the history of what led to the Social Security Act being passed in 1935, just a real quick. When The Great Depression hit one of the negative consequences of The Great Depression was the run on the American banks, where a lot of people had deposited their life savings into banks. The banks made a lot of bad risky if you will, loans. When people couldn't repay those loans, then all of a sudden, those Americans who had deposited their life savings in the banks no longer had any money.
N. Rodgers: Just as a brief note, a bank runs by taking Aughie's $10 deposit into his savings account and loaning nine dollars of it to me to buy a house, wouldn't that be nice, nine dollar house? Then keeping one dollar in reserve. But if Aughie comes in the next day and says, I change my mind, I'm going to pull out that 10 bucks and they don't have the 10 bucks, they might be able to take it from some other depositor and give it to Aughie. But if a whole bunch of people do that, then the bank closes its doors, panics and says, we're in real trouble.
J. Aughenbaugh: In the banking system, just like investing, just like buying really big purchases, whether it'd be houses or cars, it's confidence, right?
N. Rodgers: Right. If Aughie walks in there and he says I want my money and I have already paid back my nine dollar loan with my interest of two dollars, so they have $11. They can both pay Aughie's $10 back or give him his $10 and have made money.
J. Aughenbaugh: Yeah.
N. Rodgers: But if too much one way or the other then if I default on that loan, and they can't get their nine bucks from me, but a whole bunch of people do that, then Aughie can't get his money because the money is gone. The money has been lended and [inaudible]
J. Aughenbaugh: What you had with social security was a government run system to provide retirement for older Americans.
N. Rodgers: Can I say the name of the Bureau?
J. Aughenbaugh: Yeah. Come on.
N. Rodgers: The Bureau of Old Age Benefits.
J. Aughenbaugh: Yes.
N. Rodgers: If my mom had to take a check from the Bureau of the Old Age Benefits, she would not take one. I'm just telling you that sounds terrible. It's a terrible thing.
J. Aughenbaugh: My 97 year old grandmother would go ahead and bulk at that, right?
N. Rodgers: Right. Who are you calling old?
J. Aughenbaugh: Yeah. Who are you calling old?
N. Rodgers: My mom's 83. I said something about Meals on Wheels for them. And my mom said, Oh, that's for old people. I was, okay, all right.
J. Aughenbaugh: I had a similar conversation with my mom over Christmas where she was talking about walking to the grocery store and I said, Mom, the town has, Meals on Wheels, and she said almost verbatim, but that's for all people who can't get around. I can get around. I don't need that program. But I'm like, Mom, you could have it a little easier. Just pointing that out.
N. Rodgers: Yeah. What's great about that generation is, of course they don't take that unless they need to take that.
J. Aughenbaugh: Yeah.
N. Rodgers: But they take it I think to a little bit of an extreme. Because once you're in your 80s, it's probably okay to take Meals on Wheels. Just saying.
J. Aughenbaugh: Thank the Social Security.
N. Rodgers: By the way, it's now called the Social Security Administration, the SSA.
J. Aughenbaugh: Yes. Basically, the way the system is set up is that working Americans have their income taxed, and part of that taxed income goes to Social Security. if you're the government and you want to make sure that workers and employers are paying into the system, you need a way to go ahead and track both, right?
N. Rodgers: Right.
J. Aughenbaugh: What they came up with.
N. Rodgers: Because your employer can get in trouble. When I get paid from Virginia Commonwealth University, they are responsible for taking out the amount of tax that is owed to the government on that paycheck before I get it.
J. Aughenbaugh: That's right.
N. Rodgers: Because frankly, the Federal Government does not trust me to write a check for the full amount at the end of the year. They're probably not wrong to feel that way. Americans are not particularly good at savings, our savings rates are very low compared to many other developed nations.
J. Aughenbaugh: Yes.
N. Rodgers: But also it would be a really big check, relatively speaking. They spread out the pain over all of your paychecks during the year so that you're not writing one big check and having to come up with that amount of money and saying, "Well, everybody turn off the lights because we don't have any power this month because we have to write a check or whatever."
J. Aughenbaugh: Congress passed the Social Security Act in 1935. But then they go ahead and tell the Old Age Bureau to come up with a numbering system to go ahead and track contributions to the Social Security Fund.
N. Rodgers: Because you can't just do it by 1, 2, 3, 4, that's going to get out of hand quick.
J. Aughenbaugh: Quick so.
N. Rodgers: Mostly because lots of people who are being born at the same time regularly. What do you do if two babies are born at exactly the same time in two hospitals in New York, which number would you assign them? The answer to that is to have a system of numbering rather than the infinite system of we will just start with George Washington gets number 1 and then everybody else after that. Can you imagine writing your number when you're in the 300 millions?
J. Aughenbaugh: In mind you, this was how unprepared the bureaucracy was for this new government program. They only had two employees in the Bureau of old age.
N. Rodgers: We're going to need to assign numbers to everybody. What do you mean by everybody? We mean everybody.
J. Aughenbaugh: Everybody.
N. Rodgers: All the employers?
J. Aughenbaugh: Yes.
N. Rodgers: Like what?
J. Aughenbaugh: But it gets even better.
N. Rodgers: I quit.
J. Aughenbaugh: Because as longtime listeners of this podcast, will know. Even back then, nothing goes on in the US federal government without a court challenge. The constitutionality of the Social Security Act was in doubt in the following year, 1936. In part because in January of 1936, the Supreme Court held that another key part of the Roosevelt New Deal, the Agricultural Adjustment Act, was unconstitutional.
N. Rodgers: We're going to need you to make a plan to do this, but you may not implement it because it may not pass. Can I ask was the objection to the Social Security Act constitutionality, the idea of an ongoing obligation?
J. Aughenbaugh: It wasn't so much about it being an ongoing obligation. It was whether or not the federal government had the constitutional authority to create such a system. Because many businesses argued, this is another tax. How is this rooted into any constitutional authority that Congress might have? Now, eventually, the Supreme Court held in 1937 that the Social Security Act was constitutional because wait for, it could be traced to which congressional power, Nia?
N. Rodgers: I'm assuming the Commerce Clause. Because everything we've mentioned this before, every single thing in the universe comes back to the Commerce Clause. Why did we have a big bang? That it would create the Commerce Clause. All the physicists have been working on that all these years. I have the answer. Every mathematical equation that you can't figure out. Just write x equals the Commerce Clause.
J. Aughenbaugh: I like to joke Nia, my constitutional law class with my students. If you're thinking about creating a brand new widget you need to go ahead and hire a lawyer to figure out if there are any federal government regulations on manufacturer and your brand new widget. Many of my students are like, but it's only a thought. I said, yes. But Congress can regulate your economic thoughts because if a whole bunch of us have those economic thoughts? It could have a huge impact on the nation's economy. They were just like oh, that sounds so big brother S. Potentially, yes. Nia, as you pointed out, many members of Congress thought it would be easy to come up with a tracking system. Initially, the thought was your name and your address.
N. Rodgers: I love your example of why that won't work. Please tell our listeners why that won't work.
J. Aughenbaugh: People with common last names who might have similar first names. They all live in a particular city.
N. Rodgers: Now, in a city of 1,200 people, that's probably not. There's probably a junior and a senior and maybe a third.
J. Aughenbaugh: Yes.
N. Rodgers: There's probably not. Two or three or 400 people with the same name.
J. Aughenbaugh: What I came across in my research listeners was this example. A 1937 publication, it was a newspaper recounted, "A recent news accounts states that the Fred Smith of New York City have so much trouble in being identified by their creditors, the courts and even their friends that they've joined together and forming the Fred Smith Incorporated to serve as a clearinghouse for their identification problems."
N. Rodgers: I love that. There's so many people named Fred Smith in New York City in 1937 that they have to form a group to say no, that's not me Fred Smith, that's him Fred Smith. Can you imagine? I liked that they mentioned the courts. Can you imagine being sued?
J. Aughenbaugh: Yes.
N. Rodgers: Somebody walks into your office and they say John Agaba, and you say yes, and they hand you a subpoena or whatever and you're like, what's this about? They say, it's about that deer hunting episode you had in Vermont and you're like, I've never been to Vermont and I've never hunted deer there. What are you talking about? That's the other John Agaba that did that from Pennsylvania or wherever. Now, you have to show the court you're not the Fred Smith.
J. Aughenbaugh: Yes.
N. Rodgers: That's the part person in trouble here. I love that because well, first of all, we don't think about it in the modern age because we have numbers, but also because we're spread out a little bit more in terms of cities. But if you came from a city where a whole bunch of The Smiths move to and then settled, the chances are good. You're going to have at least one cousin with the same name. I don't know. I love that example. I liked that they made an incorporate. I like that. They're like, we will fight fire with fire. The Freds will unite.
J. Aughenbaugh: One of the first proposals that the now Social Security Board considered was the combination of letters of the alphabet and numbers.
N. Rodgers: Wait, can I ask a question. Why didn't they use fingerprints? Aren't they unique to a human?
J. Aughenbaugh: They are unique. But this is where privacy advocates push back. Because fingerprinting had been long associated for decades with what government function?
N. Rodgers: The cops.
J. Aughenbaugh: Yes.
N. Rodgers: We'd like your fingerprints, please. Oh wait, are you calling me a criminal? Not yet.
J. Aughenbaugh: How are we going to convince Americans to voluntarily participate in this system if they associate fingerprinting with identifying people who may have committed a crime. Is the government assuming that you're a criminal? No, the government is assuming that you have a job, but nevertheless, they wanted people to support this.
N. Rodgers: Got you. That makes sense. It just seems like it's a unique identifier. What's funny is we're now coming back to opening computers with fingerprint.
J. Aughenbaugh: Yes.
N. Rodgers: It's funny how society has moved away from that. But at the time I could see where you're saying that was only about 40 years old at that point and you're right, it was totally a criminal thing.
J. Aughenbaugh: One of the first proposals as the Social Security board Nia considered was a combination of three alphabetic characters in five numeric characters. But computer systems which were only in their infancy in the 1930s, could not handle the combination of letters and numbers.
N. Rodgers: By computer systems, can I just say that AGI means tabulate errors?
J. Aughenbaugh: Yes.
N. Rodgers: Which is a little different than what you get after, if you've seen the Imitation Game after Enigma, which is more in line with what we think of as modern computing, but still tabulators. I see. They didn't want to spend the money to companies make a new tabulation system.
J. Aughenbaugh: Any thing Yes.
J. Aughenbaugh: Then the board considered three proposals, a nine digit number an eight digit number and a seven character version. Eventually the board approved the nine digit option but the nine digit option is somewhat complex.
N. Rodgers: I just say that what's interesting to me about the nine digit number is that it's not three numbers dash three numbers, dash three numbers?
J. Aughenbaugh: That's correct.
N. Rodgers: It's way more complicated than that or it's way more specific not complicated it's specific than that.
J. Aughenbaugh: Yeah, it's more nuanced. It's three digits dash two digits, dash four digits.
N. Rodgers: Just as a side note, for listeners who are not 900 years old like me and Aughie. The first time that we went to college.
J. Aughenbaugh: Yes.
N. Rodgers: You gave your social security number to every single human on campus practically, the admissions office, the registration office, the dining hall.
J. Aughenbaugh: Financial aid.
N. Rodgers: Financial aid. Everybody was like what's your Social Security. You memorized it. I could rattle it off. In fact, I'm struggling not to rattle it off right now.
J. Aughenbaugh: Yes. Don't
N. Rodgers: Because that's all I need here is another part of my identity.
J. Aughenbaugh: But it wasn't just college.
N. Rodgers: Everything. The military used to list people by their Social Security number. That is before military had IDs. We just had to go through and destroy federal documents that had navy officers with their social security number listed.
J. Aughenbaugh: Yes.
N. Rodgers: I'm sorry, you were going to say.
J. Aughenbaugh: Well, it was banks. Automobile companies where you might have taken out a loan to buy a car.
N. Rodgers: No need your social security number.
J. Aughenbaugh: I even remember my first library card was based off my Social Security number. There I'm a 10 years old and my mom was just like, you need to memorize your Social Security number. Well, first of all, what the hell is a Social Security number? Second, why do we have to memorize this? Because she was just like everybody is going to ask you for it. Again, nobody was just, you should keep that private. There you were.
N. Rodgers: There was your number and you would say it out loud.
J. Aughenbaugh: Loud in public.
N. Rodgers: In front of big lines behind you when you got up to registration in college you go like ba, ba. They would just write it down and so could anybody standing in line behind you except that we didn't think of it in those terms. Now, as a side note, social security numbers, you couldn't get a bank account without one. There were certain things you could not do without a Social Security number, which is why it is so important for people to legally migrate to this country because when they do not take the legal means to do that. For whatever reasons and we're not here to judge it really is a handicap for them to be able to work in the regular world. What it means is that they end up working in a world where their employer may or may not pay their taxes, may or may not do all those and they can really taken advantage of because, if your employer under pays you and you say, I deserve my full pay they're going to say, really, you should tell that to ICE. Aughie's favorite department.
J. Aughenbaugh: Yes. Immigration and Customs Enforcement. You ready to go ahead and talk about how the numbers break down?
N. Rodgers: I am, but I have a question.
J. Aughenbaugh: You got a question.
N. Rodgers: Are we going to run out?
J. Aughenbaugh: Probably not.
N. Rodgers: Is it is the reason because of the visiting way in which they are assigned?
J. Aughenbaugh: This is one of those times where the complexity, actually work to the advantage of the system.
N. Rodgers: That's unusual.
J. Aughenbaugh: Yes. Next slide. The Social Security number is nine digits and as we previously mentioned, there are three digits a dash, two digits, a dash, and then there are four digits. The first three digits are known as the area number. The area number is assigned by geographical region and the Social Security board has basically broken up the United States into 12 regional centers to service all of the workers in those areas. Nia, what region do the area numbers start with? What geographical region?
N. Rodgers: It's either New York or Washington DC.
J. Aughenbaugh: Very good. It basically starts in ascending order from the Northeast and then moving to the West. In area numbers, there are all rules about these. For instance, area numbers, starting with 700-728 were assigned to railroad workers until 1963.
N. Rodgers: That's weird. It's cool, but it's, well, I don't know why rail. Federal government, we shall never truly understand you.
J. Aughenbaugh: When you talk about territories of the United States.
N. Rodgers: Oh, yeah. They have to have numbers.
J. Aughenbaugh: Yes 586 was divided among American Samoa, Guam, the Philippines, 580 assigned to Puerto Rico and the US Virgin Islands, 577-579 was assigned to the District of Columbia. By the way, if your state or region exhaust your numbers, then other people who were born there and apply for their Social Security number might have a different area sequence so for instance, Mississippi and Florida were initially assigned area numbers closer to zero but they ran out. The sequence of 587 through 588 and then 589 through 595 were assigned to Mississippi and Florida respectively after those states ran out of their potential numbers. I'm not making this up.
N. Rodgers: That's crazy to me. Numbers are finite if you have chosen nine digits. Eventually you will hit the end. I guess my question was not totally outlandish. You can hit the end of your numbers but then they'll just go find some more numbers to give you.
J. Aughenbaugh: Yes.
N. Rodgers: If Florida goes bonkers and has another huge burst boom or whatever, they'll go find more numbers to give them.
J. Aughenbaugh: That's right. Those are the areas numbers. Again, that's based on geographical region where you applied for your Social Security card.
N. Rodgers: Are there any unused numbers?
J. Aughenbaugh: Good question. Yes. Not in the 800s or 900s and non with the 000.
N. Rodgers: I want 000. Would that awesome? 000-00-0001. That'd be a great number. You could auction that number. If the government ever got into financial trouble, they could auction cool numbers and there are rich dudes who would pay zillions to have a social security number that was all 0s and 1, 1.
J. Aughenbaugh: Well, and speaking of really cool numbers. For those of you who are listening who are into numerology, there are no area numbers starting with 666.
N. Rodgers: That's awesome. Can I just say, okay, can we have a little aside about numbers and their craziness?
J. Aughenbaugh: Yes.
N. Rodgers: I love that there are no assigned number 666, but I want one now just because. I was in a hotel recently. I stayed in a hotel recently and there was a 12th floor and a 14th floor.
J. Aughenbaugh: No 13.
N. Rodgers: No 13th floor and I'm like, you know that mathematically 14 is 13 and 15 is 14 and so on and so forth because it's not like you can build a building and not have a 13th floor if you go over that. If you want to not have a 13th floor, you can only have a 12 story building. Boy, that is a thing that I mentioned it downstairs and the lady was like, "None of our hotels have 13 floors." But she didn't have a reason other than people are weird and they don't want to stay on the 13th floor.
J. Aughenbaugh: It's bad luck. Yes.
N. Rodgers: But when you're staying on the 14th floor, you are on the 13th floor anyway. If your social security number was 666, you would not be the devil. It would just be funny. Anyway, wouldn't it be great if you could get a Social Security number that was all the way through like 222-22-2222? Somebody has got that number.
J. Aughenbaugh: Theoretically, they can. There's no prohibition against that. We covered the first three digits. The second two are known as the group number. These are the fourth and fifth digits. Initially, the group number was assigned based on issuing numbers in groups of 10,000 to post offices because that's where many Americans initially went to get their Social Security cards.
N. Rodgers: Yeah. That's where I went.
J. Aughenbaugh: Yeah. They went to the post office.
N. Rodgers: Frankly, that's because and we've discussed this briefly, but we will mention it here again. The post office exists in your town even if no other government entity exists in your town. It doesn't matter where your town is, if more than four people live there, there's a post-office or there's a post-office relatively close because the post office is ubiquitous. It is like oxygen, it's everywhere and there's enormous amount of trust in it.
J. Aughenbaugh: Listeners go to our early season, so I think it was either one or two, and we did an entire episode about post offices. Members of Congress will expand.
N. Rodgers: Enormous effort.
J. Aughenbaugh: Yes, political capital.
N. Rodgers: To name a post office.
J. Aughenbaugh: To name a post office, to get a post office and to make sure that a post office doesn't get closed down even if a particular post office is not making any money.
N. Rodgers: They will throw themselves in front of that post office and say, you can't remove this.
J. Aughenbaugh: I know we're in the 21st century and I know many Americans no longer go to post offices, but Nia and I can attest because we grew up in small rural towns, post offices even today are community centers.
N. Rodgers: Right. They're more trusted than the police, than the mayor.
J. Aughenbaugh: Than the tow council, the school board.
N. Rodgers: If you had to go do all that at the city hall, people would be less inclined. But the post office, that's somebody you know, that's somebody you trust.
J. Aughenbaugh: In groups of 10,000.
N. Rodgers: Some towns have not even been through their initial 10,000?
J. Aughenbaugh: That is correct.
N. Rodgers: They are so small.
J. Aughenbaugh: Yes. There are villages in Alaska where they would have.
N. Rodgers: They got leftover numbers laying around.
J. Aughenbaugh: They would have to have a population boom of biblical proportions and they would still have numbers leftover.
N. Rodgers: Then there are some that run through 10,000,.
J. Aughenbaugh: Just like that.
N. Rodgers: In a week. Well, not a week, but a month.
J. Aughenbaugh: Yeah. Think about, for instance.
N. Rodgers: A burrow in New York?
J. Aughenbaugh: Yeah. Or a community in California. Think about in the 1970s and '80s, the Florida's population boom because so many retirees moved, then their kids followed. That's one of the things about them.
N. Rodgers: The grandkids. That's where the grandkids go.
J. Aughenbaugh: The same about migration. It wasn't just the elderly folks who were moving, and I say this because I'm increasingly into the old folks category.
N. Rodgers: Exactly, you do. Hey, when did that happen? But when children follow and their kids get born there, then.
J. Aughenbaugh: Then the last four digits are known as the serial number. The serial number is typically a straight numerical series of numbers. By the way, serial number 0000 has never been assigned and it will more than likely never be assigned. Yes.
N. Rodgers: I'm going to have that when I'm president. They're changing my Social Security number. That's a ditch I'm going to die in, except it's totally not true. There's no reason for you to fight. At this point, I don't think I could memorize another number. I also wanted to note for the record for our younger listeners, there used to be a time when people memorize numbers of all kinds, like telephone numbers. I can rattle off my mother's telephone number, my bestie's telephone number because we were told to do that and because back in the day, if you got lost, somebody would call your family and have them come get you. Now, people have phone numbers in their phones and they just click on the person and then dial.
J. Aughenbaugh: When they lose their phone?
N. Rodgers: They're lost. They're like, I don't know where I'm in the world. I can't even find myself, let alone finding help or getting it. If your phone falls into a lake, you're done, that's it. You can't communicate with any other person alive for weeks until you figure that out.
J. Aughenbaugh: How about this, Nia? We were taught to memorize addresses.
N. Rodgers: Yes, so the police could take you home if you got lost.
J. Aughenbaugh: MacKenzie and I were doing Christmas cards. Not a lot because I'm not generally a card person as Nia knows. I love receiving them, I'm terrible sending them out. But we were doing a handful of Christmas cards and I knew by memory all the addresses and MacKenzie was just blown away. She was like, daddy, "Aren't you going to look that up on the Internet?" I'm like, "No, I know your grandmother's address. I was born there."
N. Rodgers: Right.
J. Aughenbaugh: She goes, "Sometimes, I can't remember our address, daddy." I'm like, "You're 10 years old." But nevertheless, we memorize number.
N. Rodgers: They don't do that anymore.
J. Aughenbaugh: No.
N. Rodgers: I have witnessed people actually have to pull out their Social Security card. See I was told to memorize the number and not carry the card with me.
J. Aughenbaugh: Yes.
N. Rodgers: Leave the card someplace safe.
J. Aughenbaugh: Yeah.
N. Rodgers: In case I'm ever have to go to court or whatever. But anyway, there's two sides to this coin because there's the worker who gets tracked. But there's also businesses that get tracked.
J. Aughenbaugh: They get tracked by the IRS.
N. Rodgers: Because we can't have those centralized, where one group of people would organize all the numbers. No.
J. Aughenbaugh: They better not. By the way, I'm going to go ahead and briefly mention this. Remember during the pandemic, Nia, when a whole bunch of senior citizens did not get their COVID-19 tax refunds because the IRS and the Social Security Administration, their computer systems.
N. Rodgers: Couldn't talk to each other.
J. Aughenbaugh: Talk to each server.
N. Rodgers: Just as a side note for our young listeners who may not know this, if you are below a certain financial threshold, you don't have to fill in a tax form.
J. Aughenbaugh: That's right.
N. Rodgers: Many of our seniors fall into that category. They are no longer earning at a level where they have to fill out the tax form, so they don't.
J. Aughenbaugh: Yes.
N. Rodgers: But the COVID refund was based on your previous year's tax return, which if you had not done one because you were a senior.
J. Aughenbaugh: That's right.
N. Rodgers: No, sorry we can't get that to you. We don't know what to do. Sometimes numbers trip us up. Sometimes the fact that we have decentralized numbers can be a little complicated, although all Social Security numbers now come out of Maryland. It's no longer regionally, whatever.
J. Aughenbaugh: Yeah. We've centralized that, but what Nia's talking about here is if you're an employer. Let's just say for instance, Nia, later today you decide you're going to create a bird-feeding business because I know you like to go and watch your birds come to the various bird feeders. You come up with a new bird feeder that protects the bird feeder from squirrels.
N. Rodgers: I would make zillions.
J. Aughenbaugh: But it's also very attractive to all birds, and you want that in business. The IRS is going to want to track how much money you spent on starting the business, but how much money you make . What I'm talking about is the EIN, the employer identification number. Because at some point in time, Nia, as your business explodes, you're going to want to hire some workers.
N. Rodgers: If I had something that was squirrel-proof, yes, I would need.
J. Aughenbaugh: Yes.
N. Rodgers: Because everybody would want one.
J. Aughenbaugh: There are listeners, if you ever had bird feeders.
N. Rodgers: The bane of your existence is squirrels.
J. Aughenbaugh: There are squirrels who will climb down trees, climb down roofs because they want to get at the bird feed.
N. Rodgers: Leap through the air. They will knock down a passing child to climb up. I want to hire people. If I never hire a person, if I just have a very tiny business, let's say that instead I wanted to go on Etsy. I wanted to make them one at a time, would I still have to have an EIN or is that only when you have employees?
J. Aughenbaugh: Nope. You would need one.
N. Rodgers: Because I'm an employee.
J. Aughenbaugh: Yes. Because you are the employee of the business you are created so the federal government wants to make sure that you are taxing yourself appropriately. Let's just say, for instance, you're a consultant. I sometimes run into this. I might get hired to do a consulting gig. The federal government wants me to either use my Social Security number, the IRS does, or to create my own separate EIN so they can go ahead and make sure that the appropriate taxes are being taken out of my consulting check.
N. Rodgers: For those of you who are wondering when people complain about the IRS, and that tends to be fiscal conservatives, whether they are Republican or Democrat, one of the things that they get irritated by is their perception that it is micromanagement of people's businesses. That in some instances with some businesses, it would cost more to do this, to maintain a system where you do all of this than it would be to just pay whatever it is that's owed because now you have to have an accountant who keeps all the columns in order. If you pay that accountant more than you would owe in your employees' taxes, then now you're losing money on having to fill out all of this paperwork. When people say the IRS is [inaudible], it's this thing that they're talking about. It's this nuanced story stuff they're talking about.
J. Aughenbaugh: Yeah, and I understand their point.
N. Rodgers: I disagree with them, but I understand where they're coming from.
J. Aughenbaugh: I understand where they're coming from. Their biggest expense for many small businesses is what they pay their accountant. Again, the argument goes even further, Nia, which is many great ideas held by individuals get squashed when they have to go ahead and deal with all of the paperwork, etc. Back to the example of you creating this bird feeder that protects bird feed from squirrels. You might become an expert on feeding birds, what you're not an expert in is tax accounting. You might be disincentivized to develop your great idea that would be appreciated by bird lovers across the world.
N. Rodgers: Seriously.
J. Aughenbaugh: You're like, I spend more time interacting with my tax accountant.
N. Rodgers: Than I do-.
J. Aughenbaugh: Manufacturing.
N. Rodgers: Fine-tuning my brilliant fabulous bird feeder.
J. Aughenbaugh: Now the EIN is also a nine digit number.
N. Rodgers: Yeah, Because that's not confusing.
J. Aughenbaugh: But it is broken up this way. Two digits dash seven digits.
N. Rodgers: Okay, so it's expressed differently, which theoretically helps you know the difference between the two-nine digit numbers that you're looking at, which is why they make you put it in the dashes, I assume?
J. Aughenbaugh: Yes.
N. Rodgers: Otherwise, that could get really confusing really quickly.
J. Aughenbaugh: Yeah. Because think about it Nia, what other nine-digit number exists?
N. Rodgers: Telephone numbers, wait, are they nine digit?
J. Aughenbaugh: Telephone are 10.
N. Rodgers: Yeah.
J. Aughenbaugh: But again, the dashes are essential. If you're trying to go ahead and remember numbers.
N. Rodgers: Right. Because humans very rarely rattle off 10 numbers without pause.
J. Aughenbaugh: Yes.
N. Rodgers: Almost always when you are telling somebody a phone number, 804-828-856-5, which by the way is my office phone number. If you want to call my office and you hear the natural rhythm of that breakup. Because humans don't do a really good job at just rattling off giant numbers except those polymath among us who can do that with like Pi. Where you say, what's Pi to the 20th, and they go blah, about, and you just wow, because that's not the way humans normally memorize numbers.
J. Aughenbaugh: Think about-
N. Rodgers: Thank goodness, zip codes are only five, which I think we're going to get to in our next episode right, zip codes.
J. Aughenbaugh: Yes.
N. Rodgers: There are only five, which is great because if they were any longer than that, I don't know if I'd just be lost and wouldn't be able to send myself mail.
J. Aughenbaugh: Because zip codes.
N. Rodgers: There are actually nine.
J. Aughenbaugh: That was controversial, but we will get the zip codes in our next episode. Because again, that's another way for the government to track you. The all-powerful, ubiquitous post office.
N. Rodgers: Right.
J. Aughenbaugh: Come on. To me what was fascinating was the EIN was not created until 1974.
N. Rodgers: We didn't have businesses before that Aughie. I don't know what you're thinking.
J. Aughenbaugh: But the first time it was put into the tax code was 1954 but the IRS drag its feet which was fascinating to me. You want to talk about the power of the bureaucracy.
N. Rodgers: Well, and the powers of politics, I'm not sure it was controversial as all heck and get out.
J. Aughenbaugh: Yes.
N. Rodgers: To try to force businesses to comply.
J. Aughenbaugh: Yes.
N. Rodgers: Which is what you're doing here, that you're forcing businesses to comply with tax law and I'm sure there was a lot of resistance.
J. Aughenbaugh: Yes, it was passed first in a Republican presidential administration, Eisenhower, and it doesn't become operable until 1974 during another Republican presidential administration, Gerald Ford. Two moderate Republican.
N. Rodgers: That's funny because really you would think that Republicans would have avoided any sort of.
J. Aughenbaugh: Yes.
N. Rodgers: Anything that made it easier for the IRS to tax corporations.
J. Aughenbaugh: Yes and again, monitor small businesses. Corporations basically understand that they're going to have to go ahead and deal with a whole bunch of tax agencies at the federal, state, and local level.
N. Rodgers: Hence why they have multiple tax attorneys, multiple accountants.
J. Aughenbaugh: Yeah. They have firms on retainer small businesses. Again, you want to talk to you about a potential disincentive for small business, force them to go ahead and deal.
N. Rodgers: Right. I have four employees, but I have to pay a fifth employee, which is my accountant, to keep me out of tax prison. By the way, people do go to prison for not paying taxes or not paying their taxes properly. Probably not the people we would like to see do that because some of those are big corporate people that we would like, I would love if Jamie Diamond went to prison. That's never going to happen. But when you're talking about the smaller institutions, a lot of times what happens to, and just as a side note before we go, is if you get in trouble with the IRS, most often the IRS will actually if you are reasonable, they will be reasonable. They will talk to you and work out some payment plan or something. Running from the IRS is a terrible idea because they never get tired and they will eventually find you wherever it is that you are on the planet. Ask what is his name, mister, the crypto guy, who was like, I'll be safe in the Bahamas. It turns out, no, you won't. Is Franklin free? If you're reasonable and you talk to them, it can still drive your business out of business. If they hit you with enough fines or you've back taxed enough where you just can't make enough money to get out from under it, then you might have to declare bankruptcy and that's just sad. But I think it's interesting that both of those numbers are nine numbers and they're just broken up by dashes differently because that's not a computing nightmare.
J. Aughenbaugh: Again, I first experienced this once I got my PhD and I started doing consulting. I would get these tax forms and they would ask for my EIN and I still remember having to slog through the associated paperwork to understand that the EIN was not my social security number.
N. Rodgers: Right.
J. Aughenbaugh: I had been so conditioned just to go ahead and give the IRS even my social security number because when you fill out your yearly tax return, they ask for your social security number.
N. Rodgers: That's how they figure out who you are.
J. Aughenbaugh: That's what I thought it was and then there was this big bold print on the tax form that I had to fill out as a consultant that said this is not your Social Security.
N. Rodgers: Comma Aughie period. They were talking just to me.
J. Aughenbaugh: Hey, dummy. This is a different nine-digit number and again, I was just like ugh.
N. Rodgers: If you're wondering where that number is, the EIN is on your W_2, if you work for anyone other than yourself, on your W_2 to the left of the form pretty early on, like it's a fourth or fifth box that gives your EIN and that's one of the things that you have to list on your tax form because they're not just checking you to make sure you're doing right there also checking your employer.
J. Aughenbaugh: Yes.
N. Rodgers: To make sure that they are doing the right thing.
J. Aughenbaugh: If your employer is not taking out the right to taxes, and this is at all levels, then the employer can get into trouble.
N. Rodgers: But the employee can say I didn't have anything to do with that.
J. Aughenbaugh: Because it is the employer's responsibility and that was part of the initial pushback politically when the social security system was set up, was that the government was like, well, we're not going to force employees to make sure that they make the right contribution to the social security system. We're going to enforce employers and employers are just like, hey?
Welcome to Civil Discourse. This podcast will use government documents to illuminate the workings of the American Government and offer contexts around the effects of government agencies in your everyday life. Now your hosts, Nia Rodgers, Public Affairs Librarian and Dr. John Aughenbaugh, Political Science Professor.
N. Rodgers: What'd we do? But it makes sense because they-
J. Aughenbaugh: It is centralized.
N. Rodgers: Right. By a bunch of employees centralized rather than each of those individuals having to get the numbers right.
J. Aughenbaugh: Yes.
N. Rodgers: Yeah. Before we go, Can I just say that I really wish that the IRS would just present me with a form and say, does everything look right? If it looks right, sign it and we're good.
J. Aughenbaugh: Yeah.
N. Rodgers: Instead of me having to do it on my side, since they know how much I made, not only from me but from my employer, they can just send me a form that says check here if everything's right and sign your name to it.
J. Aughenbaugh: Nia, it's like you're channeling a conversation I have every year with my tax person who I think at this point doesn't even bother rolling her eyes at me.
N. Rodgers: Yeah.
J. Aughenbaugh: He just waits for the rant and says, okay Aughie, this is what you're going to get back. It's like a scripted conversation because I'm just like, they know how much money I make.
N. Rodgers: Why are they putting me through this? Thank you Aughie this is great.
J. Aughenbaugh: Listeners, a follow-up episode is we're just going to focus on zip codes, which again is wholly fascinating.
N. Rodgers: If you thought this was interesting, wait till you get to zip codes. Cool. Thank you, Aughie.
J. Aughenbaugh: Thank you, Nia.
You've been listening to civil discourse brought to you by VCU Libraries. Opinions expressed are solely the speaker's own and do not reflect the views or opinions of VCU or VCU Libraries. Special thanks to the Workshop for technical assistance. Music by Isaak Hopson. Find more information at guides.library.vcu.edu/discourse. As always, no documents were harmed in the making of this podcast.