I say shaft the young.
A new payroll tax should be instituted, of about 2%. Everybody over 50 to retirement age would pay out the entire payroll into SS. Those between 16 and 50 would pay the new 2% into a private retirement account, with the old payroll tax still going into SS. Everybody entering the workforce 15 and under would pay all their payroll taxes, up to 5% of income, say, into private retirement accounts from day 1 of their working lives.
Shift the age brackets around as needed, but current or soon-to-be retirees would get the full benefit of SS as currently in place, paid by current payroll taxes. Those people now between 16 and 50 would have their private retirement accounts, and SS would pay a discounted residual difference at retirement between what they would have received from SS alone (or nothing if their private account pays more). Hopefully, the majority of workers would receive no SS because their private wealth would exceed what they would have received from SS, and their payroll taxes to SS would be a net gain to pay ongoing liabilities. Those now under 16 would receive no SS, ever.
Something like that might provide a declining SS liability over time, until SS is phased out. The SS administration would continue to administer SSNs and regulate private retirement accounts.
Done in two generations, knock on wood. |
