Increasing Taxes to Make up Funding Shortfalls
There are many reform proposals going around and some gaining traction within congress already on how best to fix Social Security. In its current state, Social Security would run out of money in its reserves by 2034. One obvious solution would be to inject more money in to the system in order to keep up with the increased spending. This, however, is not a very popular solution because that money would come from an increase in taxes. Some calculations show that a payroll tax increase by 3.39% would be enough to offset the increase in spending. This is the solution that most are trying to avoid, the solution that is most obvious and likely the most effective, would cause a whole slew of other problems as the average person would be left paying an additional $1,761 each year on top of their current taxes. For more information visit this article by Sean Williams with The Motley Fool.