Fixing Social Security
Duncan Black reads the Social Security Trustees' Report:
Eschaton: "Fixing" Social Security: In the summary overview we have this:
Social Security could be brought into actuarial balance over the next 75 years in various ways, including an immediate increase of 16 percent in payroll tax revenues or an immediate reduction in benefits of 13 percent or some combination of the two.
Roughly, this would require increasing both the employee and employer share of the tax from 6.2% to 7.05% (there might be some employment/wage impacts of such a change so this is a rough take). A small price to pay to ensure Robert Samuelson never writes another column.
How about just uncapping FICA, and making a few adjustments to make it harder to hide employee compensation from FICA by calling it an investment return? That would get us to actuarial balance too.
