Employer Compensation Tax proposal - The Committee for a Responsible Federal Budget
The Committee for a Responsible Federal Budget just released its analysis of the Trust Fund Solutions Initiative white paper, suggesting a new alternative by replacing the employer side of the payroll tax with a flat Employer Compensation Tax (ECT) on all employer compensation costs. Although “workers would continue to pay payroll taxes, employers would instead pay an ECT on all wages (with no tax cap) and all fringe benefits such as employer-sponsored insurance and stock options.” The Committee does not endorse any particular solution; it admits that “ECT alone would not be sufficient to restore solvency to Social Security and Medicare at the current payroll tax rate, but the Employer Compensation Tax (ECT) presented in this paper should be added to the library of potential options lawmakers consider when crafting a broader reform package.”
To read the Committee’s full analysis, click here…
Many organizations charged with recommending solutions to this daunting problem have put forth proposals, some affecting partial corrections, some complete redirection of Social Security’s fundamental design. The Association of Mature American Citizens (AMAC), for example, has developed a 15-point plan that would resolve the funding shortfall and preserve this critical program for current and future generations while addressing some of the underlying imbalances in Social Security’s current structure. Click here to read AMAC’s Social Security Guarantee legislative framework proposal.
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