Americans are living longer, which is good.
But the current FICA tax can't finance currently promised Social Security benefits during the longer number of years people will be retired.
This could soon become a major problem.
George W. Bush's proposed "privatization" fortunately never went anywhere.
Putting FICA tax receipts into individual stock market accounts wouldn't guarantee "security" of retirement income.
While stocks can be excellent long term investments, their value has been known to fall in half, or stagnate, for decades.
Social Security benefits that could be cut in half would be a terrible idea.
A current Republican proposal is to increase the age required for full Social Security benefits, a benefit reduction.
This was already done once under bipartisan legislation in 1983.
But benefit cuts would have to be phased in gradually to be politically viable.
Even Emmanuel Macron's highly unpopular increase in the retirement age ihn France will be phased in gradually from now until 2030.
Gradual benefit cuts wouldn't save the government much in the short run.
As the Center For Budget and Policy Priorities reports, "benefit cuts won't be enough to close Social Security's financing gap, especially in the short run. Increasing revenues will be necessary to restore solvency."
The chief Democratic proposal is to increase Social Security taxes only for the rich.
But as Nobel-winning economist Paul Krugman has pointed out, "we're going to need more revenue than you can raise by taxing people with very high incomes."
The fairest and simplest approach would be to increase the Social Security tax paid by all workers (and by their employers). Congress could increase the tax base (the amount of wages subject to the tax) and/or increase the tax rate.
The tax base could be increased by including the value of employer provided health insurance in the "wages" on which Social Security taxes are paid. It is arbitrary not to tax this compensation at the same rate as wages received as money.
Workers whose jobs don't provide insurance already pay the FICA tax on all of their wages, thus paying a higher percentage of their compensation as taxes.
Workers greatly outnumber rich people, so even a modest increase in the Social Security tax rate would produce enough additional revenue to keep the program solvent.
Unfortunately, both parties fear telling voters that they cannot have benefits they have not paid for.
Many Republican politicians have taken the "Norquist Pledge" never to raise any taxes.
Democratic leaders, including Barack Obama and Joe Biden, have promised not to raise taxes on families making less than $400,000.
Such promises, if kept, make it impossible to govern responsibly.
Some politicians favor reducing or eliminating Social Security benefits for wealthier individuals. But the fewer people benefiting the less likely Congress would be to continue the program.
And means testing would require detailed and expensive bureaucratic snooping on everybody and encourage people to conceal their true wealth.
We already have some means testing, but it is done indirectly in a way which does not threaten continuing majority support for Social Security.
People with more than a certain amount of retirement income must pay federal income tax on up to 85% of their Social Security benefits.
This reduces the net benefit received by better off people without reducing their cash benefit, but does not reduce the net benefit of retirees whose main income is Social Security.
The additional revenue from taxing Social Security benefits goes, not into the government treasury, but into the Social Security Trust Fund, bolstering the program's solvency.
As private pensions become less and less dependable, Social Security will be an increasingly valuable part of retirement finances.
And it is a helpful economic stabilizer during recessions.
Both parties should stop pledging not to raise taxes, and voters need to stop supporting candidates who do this.
Only then can we keep Social Security solvent and paying full benefits to all retirees.
Paul F. deLespinasse is Professor Emeritus of Political Science and Computer Science at Adrian College. Read Professor Paul F. deLespinasse's Reports — More Here.
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