A better way to fund Social Security? - Tax Foundation
With the national debt rising to over 100 percent of GDP and Social Security’s impending insolvency, lawmakers will be forced to implement efficiency-enhancing reforms. One of the many proposals is to uncap the payroll tax, which would lift the cap on earnings subject to Social Security payroll taxes. However, another possible reform policymakers could consider is broadening the payroll tax base to previously untaxed forms of compensation, such as employer-sponsored health insurance (ESI). Guy Cardwell and Alex Durante, writing for the Tax Foundation, explore the options that shows a better way to fund Social Security. To read their article, click here…
While some other organizations only verbally lament this looming crisis, The Association of Mature American Citizens (AMAC) is actively engaged in providing Congress with ideas for a long-term solution. As an example of leading thinking on reforming Social Security, AMAC believes Social Security must be preserved and modernized to serve future generations. AMAC’s position is that this can be achieved without payroll tax increases through relatively minor program modifications, including changes to the cost-of-living adjustment (COLA) process and modifications to the formulas for calculating initial benefits for higher-income beneficiaries. Changes to the age for maximizing benefits are included in AMAC’s position, along with (1) an increase in the thresholds where benefits are subject to income tax; (2) indexing of these thresholds annually to account for inflation; (3) changing the taxable maximum formula to address the unintended loss of revenue; (4) improving survivor benefits, (5) eliminating the reduction in benefits for those choosing to work before full retirement age; and (6) improving savings tools for future retirees, including a savings account that builds estate value. AMAC is resolute in its mission that Social Security be preserved for current and successive generations and has gotten the attention of lawmakers in D.C., meeting with many congressional offices and staff over the past decade. See AMAC’s proposal for Social Security reform here.
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