John,
1. Raise the cap on FICA taxes to ~$150K.
2. Adjust the COL adjustment to an average of wage and price inflation.
3. Raise the FICA tax by 1% on the employee and employer side.
I think tax increase of this magnitude would have a sizeable negative effect on the economy.
My idea would be to first of all cap the amount of payments. The way I would achieve it is by capping the number of recipients to today's count. This would mean that your retirement age would not be on your 65th birthday, but on a day given to you by the government. The date will depend on number of existing retirees who die in a given month. So there would be a queue to get into SS.
Given the baby boomers are going to start to retire, this queue would greatly accelerate the retirement age from the current proposal. Apparently, based on current formula, my retirement age will 67 some decades away. With the queue, the 67 retirement age may be reached 5 or 10 years from now, and it will not stop there.
With the benefits capped, and the system having positive cashflow, the positive cashflow would persist basically forever, and it could be used as a phase in of the individual accounts.
This approach would, while not entirely fair, since it does not touch at all all the retirees on the dole currently, who are making out like bandits, it would IMO be the most viable.
This method would basically create a cutoff for baby boomers. They would no longer be allowed to be the bandits the generations before them with regard to SS benefits.
Joe |
