Comments for The Impact of the Upward Redistribution of Wage Income on Social Security Solvency at http://www.cepr.net , comment 1 to 2 out of 2 comments http://www.cepr.net Sun, 19 May 2013 12:22:37 +0100 FeedCreator 1.7.3 http://www.cepr.net/index.php/blogs/cepr-blog/the-impact-of-the-upward-redistribution-of-wage-income-on-social-security-solvency#comment-21845 http://inequality.org/minimum-wage/ The minimum wage would be $21.16/ hour had it been indexed to income growth. The additional income taxes would easily close the federal deficit. The additional SSI tax would easily close the SSI deficit. In fact, because of the increased productivity of the American workforce, we could all retire more comfortably, and earlier. And increase Government spending while also lowering income tax rates. Best wishes, Steven - Steven Sat, 09 Feb 2013 14:34:51 +0100 http://www.cepr.net/index.php/blogs/cepr-blog/the-impact-of-the-upward-redistribution-of-wage-income-on-social-security-solvency#comment-21747 Dean is correct that if wages continued to rise for "average" workers, the actuarial deficit would be significantly smaller. The rise in wages over time is what provides the "effective interest" that allows Social Security benefits to be greater than what each generation paid in taxes. This is not exactly the same thing as saying that the change from 90% of wages being taxes for Social Security to 83% of wages being taxes "causes" the shortfall. The shortfall is caused by the failure of most people's wages to rise. There is no "natural" justification to trying to reclaim the lost income to SS by taxing more of the wages of those who are in the high earning group. Raising the cap, raising the taxes of "the rich" would only mean that "the rich" would be paying more for their Social Security benefits than they would reasonably consider a fair price for the insurance value of Social Security. It is true that we should be making every effort to get higher wages for the average worker, but we cannot expect to do this immediately. What we can do immediately, is recognize that if workers increase their own tax by one tenth of one percent per year... that's eighty cents per week per year in today's terms... they can guarantee their retirement at the normal retirement age with a benefit that is the same replacement rate as today's. This would have the very important advantage of "doing something now" about Social Security that would prevent the Big Liars and the politicians who serve them from cutting benefits or raising the retirement age. And this would close the actuarial deficit by 100% and end the dishonest "debate" about Social Security. Some time in the future we might change the politics that results in wage stagnation for average workers. But meanwhile SS is DESIGNED to protect your retirement even in bad times like these... if you pay for it. - coberly Tue, 05 Feb 2013 12:48:04 +0100