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Politics : A US National Health Care System?
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To: Mary Cluney who wrote (6178)2/17/2009 9:42:59 PM
From: i-node  Read Replies (1) of 42652
 
75% of the shortfall in the projected SS payout in 2032 could be eliminated by lifting the cap on the payroll tax. The rest of the short fall could be eliminated forever if the tax rate were increased by .6 percent.


I'm not sure about these numbers; I don't doubt the first part but I don't think an increase in the tax rate of 0.6% (not sure if you mean 0.3% * 2 or 0.6% * 2) is going to do it.

But I don't think you could hand workers that kind of PR tax increase without it smashing the economy. That's a lot of money.

If you remove the cap on the PR tax to fix SS, what do you do about Medicare?

The only thing, IMO, that might fix these problems is massive economic growth which leads to a glut of income taxes with which these problems can be addressed (out of general revenue). And the likelihood of that happening seems at best extremely remote.

Around '83, there was an article in the CPA Journal written by a former chief actuary of the SSA. In that, he wrote that the end game with SS would be a tax revolt. That eventually, the payroll tax required to make ends meet would be so high that essentially all disposable income would be required to feed it. He presented a well-reasoned argument with the data to back it up. Even with the '83 amendments, I think that's what we're facing.

It is a very grim picture if you ask me.
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