If workers paid the social security tax on all their earnings, this would at least postpone systemic problems for decades and likely eliminate them altogether. It’s hard to say for certain, but the most popular proposed fix, per the polls, is to eliminate the earnings limitation. There is, however, nothing that says the current balance between the contribution limit and benefits is set in stone. The rationale for this is that benefits are limited as well, so limiting the amount taxed to pay for those limited benefits is equitable. Right now, social security contributions are limited to the first $132,900 of income if you make more than that, you don’t pay on the excess. But we also need to keep paying enough to support Gen X (which is to say, my generation) and everyone who comes after us.Ĭan we raise social security revenue enough to do that? In fact, economically, it would be quite simple. Running down the boomers' excess social security balance is fine to pay for their retirements. So, what we should be worrying about-intelligently-is whether and how that social security revenue stream can be raised to a level that allows the system to operate in a long-term balance. The problem is that the revenue raised for the social security program is, as of now, insufficient to allow that balance to be kept. The problem is not the deficit, nor is it that benefits may be cut in 30 years. Now, we can start to worry about it intelligently. ![]() By putting it this way, however, we have defined the problem.
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