Re:2001 SSAB says only 88% of deficit is taken care of by no wage base cap

[papau]

Re:2001 SSAB says only 88% of deficit is taken care of by no wage base cap

Saddly the above SSAB report is the last one that is useful to the debate (I do not find similiar post Clinton reports).

The dates we discuss today - 2018 which is the first date a small portion of the Soc Sec Trust Fund Assets are projected to need to be sold, and 2043 which is the first date the payroll tax take plus asset sales will not cover the benefit payout - are 2016 and 2038 in this report, so the situation has improved.

Plus it discusses the effect of various solutions in terms of the percentage of deficit that is taken care - where deficit is the hoary old average (add each of 75 years over funding or under funding percentage to get an average for the 75 years). The Problem with this approach is that it was designed and chosen as an early warning system - not as an exact calculation of what additional percentage tax is needed. The actual tax increase needed will be much smaller because of the interest earned on the Trust Fund assets.

In any case it is safe to say that with the 2038 of 2001 becoming the 2043 of 2004 we can expect the "88%" of deficit paid off by eliminating the wage cap and paying benefits on all wages that is in the 2001 report to now be closer to 100% of deficit.

And indeed I am told that a no wage cap 75 year run out ends up quite positive under the intermediate projection. But God forbid Bush would allow the Social Security Administration Actuaries to publish such a projection.

And God forbid that the payroll tax be applied to income - including unearned income - rather than just wages. The Bush mantra is to not tax the 90% of their yearly income that is investment income.


http://www.ssa.gov/OACT/TR/TR04/II_cyoper.html#wp89438



http://www.ssab.gov/NEW/Publications/Financing/actionshouldbetaken.pdf
Report from the Social Security Advisory Board -- page 21


Increase the amount of earnings subject to the Social Security tax.

In 2001, earnings in employment covered by Social Security that
exceed $80,400 are neither subject to payroll tax nor considered for
calculating benefits. This "contribution and benefit base" increases
automatically each year with increases in the average wage.

Currently,about 84 percent of all covered earnings are below the base, but thispercentage has been falling from about 90 percent in 1983 and is projected to continue to fall to about 83 percent in 2010.

Making all earnings covered by Social Security subject to the payroll
tax beginning in 2002, but retaining the current law limit for benefit computations (in effect removing the link between earnings and benefits at higher earnings levels), would eliminate the deficit. If benefits were to be paid on the additional earnings, 88 percent of the deficit would be eliminated.

Making 90 percent of earnings covered by Social Security subject to
the payroll tax and paying benefits on the additional earnings
(phasing in these increases in 2002-2011) would eliminate 37 percent
of the deficit. This would increase the estimated maximum amount of
earnings subject to Social Security taxes in 2011 to $241,200,
compared to the projected level of $125,100 under present law (in
current dollars). These changes would cause higher-paid workers and
their employers to pay higher taxes. They would mean that higher-paid
workers (those above the current taxable maximum) would receive a
lower average rate of return on their Social Security taxes than they
do today.

[NMDemDist2]

1. i've got no problem not taxing investment income as long as there

is a "means" test

millionaires shouldn't get SS

[papau]

2. either millionaires are in SS and "overpay" - helping everone - or

they duck one more general obligation of society because they might pay "too much tax".