Senator Mark Begich (D-AK) put forward a reform package that would remove the payroll tax cap for Social Security, and financially secure the program’s trust fund for roughly the next seven decades. The Washington Post’s Dylan Matthews laid out the details:
The Begich bill would lift the current payroll tax cap, which exempts wages in excess of a certain amount ($110,100 this year) from the tax. In turn, it would give high earners, who would pay more, additional benefits upon retirement, just as benefits increase as wages do for workers below the cap.
It also increases benefits across-the-board. While Bowles-Simpson and Domenici-Rivlin adopt a stingier “chained CPI” measure for inflation, Begich adopts “CPI-E,” or a measure that specifically captures inflation in goods that seniors buy.
Due to deteriorated health and other considerations, goods seniors buy tend to be more expensive than those younger people purchase. Begich’s CPI-E change would mean, effectively, a 4.5% benefit increase for the program’s beneficiaries, including not just seniors but their designated survivors and disabled Americans as well.
The Congressional Research Service ran the numbers back in 2010 and concluded that eliminating the payroll tax cap — while also paying out the new benefits to wealthier Americans in accordance with their new taxes — would eliminate 95% of the trust fund’s shortfall over the next 75 years.
http://www.washingtonpost.com/
Senator Mark Begich (D-AK) put forward a reform package that would remove the payroll tax cap for Social Security, and financially secure the program’s trust fund for roughly the next seven decades. The Washington Post’s Dylan Matthews laid out the details:
The Begich bill would lift the current payroll tax cap, which exempts wages in excess of a certain amount ($110,100 this year) from the tax. In turn, it would give high earners, who would pay more, additional benefits upon retirement, just as benefits increase as wages do for workers below the cap.
It also increases benefits across-the-board. While Bowles-Simpson and Domenici-Rivlin adopt a stingier “chained CPI” measure for inflation, Begich adopts “CPI-E,” or a measure that specifically captures inflation in goods that seniors buy.
The Begich bill would lift the current payroll tax cap, which exempts wages in excess of a certain amount ($110,100 this year) from the tax. In turn, it would give high earners, who would pay more, additional benefits upon retirement, just as benefits increase as wages do for workers below the cap.
It also increases benefits across-the-board. While Bowles-Simpson and Domenici-Rivlin adopt a stingier “chained CPI” measure for inflation, Begich adopts “CPI-E,” or a measure that specifically captures inflation in goods that seniors buy.
Due to deteriorated health and other considerations, goods seniors buy tend to be more expensive than those younger people purchase. Begich’s CPI-E change would mean, effectively, a 4.5% benefit increase for the program’s beneficiaries, including not just seniors but their designated survivors and disabled Americans as well.
The Congressional Research Service ran the numbers back in 2010 and concluded that eliminating the payroll tax cap — while also paying out the new benefits to wealthier Americans in accordance with their new taxes — would eliminate 95% of the trust fund’s shortfall over the next 75 years.
http://www.washingtonpost.com/
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