The Senate Budget Committee held a hearing yesterday on Social Security Forever: Delivering Benefits and Protecting Retirement Security. Here are the written statements before the Committee.
- Martin O'Malley, Commissioner, Social Security Administration
- Rebecca Vallas, Chief Executive Officer, National Academy of Social Insurance
- Roger Boudreau, President, Rhode Island AFT/Retirees Local #8037R
- Molly Dahl, Long-Term Analysis Unit Chief, Congressional Budget Office
- Shai Akabas, Executive Director, Economic Policy Program, Bipartisan Policy Center
This is from a news article on the hearing:
… The ultra-wealthy are avoiding nearly $2 trillion in taxes every 10 years," Sen. Ron Wyden (D-Ore.) said during a Senate Budget Committee hearing. "That is enough to keep Social Security whole till the end of this century."
"That's where we ought to go to start making progress," Wyden added. …
7 comments:
Glad someone is talking about the funding shortfall. Charles needs his income source!
The American people need their income source.
The ultra wealthy aren't avoiding paying $200B in social security taxes each year anymore than regular workers are avoiding paying a tax that doesn't apply to them. There's a cap on how much of their wages can be taxed. If that changes, they will pay themselves another way not subject to the tax.
Bingo. This is the ultimate flaw in the funding model. I am unaware of a fix other than the Modest Proposal of nuking payroll taxes and funding Social Security benefits through general funds.
We do that now.
Solution: Expand the FICA cap to 90% of average wages as intended (it’s fallen to 82%). Secondly, increase the FICA tax by 0.1% a year for the next decade. Offset this by a 0.1% decrease in income taxes over the next decade for all earnings under the cap.
Not at this point. The payroll taxes are insufficient to cover current benefits, but general fund use is applied against the accounting gimmick of the Trust Fund. But as long the primary funding method is payroll taxes, the funding structure is regressive.
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