"But we can"t afford it."
With a federal tax rate of nearly 15% of US GDP, some of us can more than afford to provide seniors with more than $10,000 a year to live on. Unless you're expecting Congress to manufacture a new IRA that grows hair, the best option to elevate the 39% of the average workers preretirement earnings that Social Security currently pays is to "find an additional 5 percent of taxable payroll, or find the money elsewhere."
Lifting the cap on payroll taxes without raising benefits to those above it provides an additional 2.32%
"Dedicating revenues from the estate tax at its 2009 levels to Social Security gets another half percent. A few other tweaks, like covering new public employees, add another 0.42 percent.
"The remainder can be found by raising the payroll tax by roughly 1 percentage point for both employees and employers..."
"Retirees today are shortchanged on Social Security because they have been shortchanged on wages for their entire working lives.
"The labor economist Richard B. Freeman points out that the hourly earnings of workers dropped by 8 percent from 1973 to 2005 while productivity shot up 55 percent or more.
"The United States is one of the few developed countries where workers are routinely cheated of a share in higher productivity.
"And where has the money from the extra productivity gone? Its gone right to the top, to the top few percent.
"If wages had been paid fairly based on productivity, there would have been enough money subject to the payroll tax to avoid even a modest shortfall."
http://www.nytimes.com/2011/06/20/opinion/20geoghegan.html?hp
With a federal tax rate of nearly 15% of US GDP, some of us can more than afford to provide seniors with more than $10,000 a year to live on. Unless you're expecting Congress to manufacture a new IRA that grows hair, the best option to elevate the 39% of the average workers preretirement earnings that Social Security currently pays is to "find an additional 5 percent of taxable payroll, or find the money elsewhere."
Lifting the cap on payroll taxes without raising benefits to those above it provides an additional 2.32%
"Dedicating revenues from the estate tax at its 2009 levels to Social Security gets another half percent. A few other tweaks, like covering new public employees, add another 0.42 percent.
"The remainder can be found by raising the payroll tax by roughly 1 percentage point for both employees and employers..."
"Retirees today are shortchanged on Social Security because they have been shortchanged on wages for their entire working lives.
"The labor economist Richard B. Freeman points out that the hourly earnings of workers dropped by 8 percent from 1973 to 2005 while productivity shot up 55 percent or more.
"The United States is one of the few developed countries where workers are routinely cheated of a share in higher productivity.
"And where has the money from the extra productivity gone? Its gone right to the top, to the top few percent.
"If wages had been paid fairly based on productivity, there would have been enough money subject to the payroll tax to avoid even a modest shortfall."
http://www.nytimes.com/2011/06/20/opinion/20geoghegan.html?hp
