Social Security and Progressive Thinking: A Look at Statistics - The Tax Foundation
“The latest Congressional Budget Office figures for 2017 show that the federal fiscal system—both taxes and direct benefits—is very progressive and redistributive.” So says the Tax Foundation in their commentary on the CBO’s recent study titled “The Distribution of Household Income, 2017.” The report, along with the Tax Foundation’s summary analysis of its conclusions, sets the stage for deliberation as the Biden Administration moves ahead with its agenda to would make the federal fiscal system more progressive. Hopefully, these details will find their way into the debates, when they happen, about the future direction of Social Security.
Of particular interest in this analysis is the role that direct benefit programs, notably our Social Security System, played in raising the net income attributable to federal fiscal policy experienced by the lowest quintile of households to 126% while affecting fourth and fifth quintiles negatively. As noted by the Tax Foundation in their analysis, these statistics suggest that “… on average, federal programs are doing a great deal to lift the incomes of middle- and lower-income households.” With a hearty nod to progressivism already baked into Social Security’s very structure, it’s possible that reform discussions will focus more on long-term solvency and on related avenues of retirement security planning, like correcting the personal savings problems many future retirees are dealing with.
In any event, the statistics provided by the CBO will help legislators prepare for whatever reform measures are considered. For more background on this subject, check out the Tax Foundation’s post here…
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