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Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsExpanding Social Security Is the Cheapest Way to Bring More Security to America's Retirees
http://www.alternet.org/books/expanding-social-security-cheapest-way-bring-more-security-americas-retireesEditors note: The following is an excerpt from a new book, Social Security Works! Why Social Security Isnt Going Broke and How Expanding It Will Help Us All, published by The New Press, 2015, all rights reserved. Order a copy here.)
How should the costs of an expanded Social Security be shared without unduly burdening anyone? There are numerous options, all quite affordable, reasonable, good policy, and fair.
Social Securitys wage insurance has been financed, from the beginning, primarily from premiums split evenly between employees and employers. Those premiums today are12.4 percent of wages, equally divided between employer and employee, up to a maximum salary amount, $118,500 in 2015. The 12.4 percent rate has not increased since 1990.
If the rate were to be gradually increased by 1 percent on employers and employees each, over a two-decade period, as some have recommended and we propose, that would translate to an average increase of about 50 cents a week each year. Just that gradual increase would bring in substantial revenue as shown in Social Security Works!.
Social Security premiums are assessed against covered compensation. A larger and larger proportion of compensation is paid not as cash but as deferred or noncash compensation, such as health insurance and so-called flexible spending accounts for such items as medical expenses, dependent care, and commuting costs. This compensation is generally not treated as compensation covered by Social Security. The failure of this compensation to be counted for Social Security purposes means that those noncash wages are not insured against loss in the event of death, disability, or old age. Moreover, the tax code unintentionally encourages employers and employees to set up deferred or noncash compensation plans for the express purpose of avoiding part of the cost of the mandatory Social Security premiums. If just payments to flexible spending accounts were considered wages for Social Security purposesas contributions to 401(k) plans already are, and as we advocatethe change alone would generate meaningful new revenue. The revenue produced would be even more if combined with increases in both the Social Security contribution rate and the maximum dollar amount on which that rate is assesseda proposal that is described next.
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Expanding Social Security Is the Cheapest Way to Bring More Security to America's Retirees (Original Post)
xchrom
Jan 2015
OP
daleanime
(17,796 posts)1. Hell yes.....
Sherman A1
(38,958 posts)2. +1000
Recursion
(56,582 posts)3. The retirement age should be 65 minus the unemployment rate
That would solve a lot of problems right there.
Scuba
(53,475 posts)4. "Enrich and Expand Social Security" should be a Democratic Party campaign platform basic.
woo me with science
(32,139 posts)5. K&R
Enthusiast
(50,983 posts)6. K&R! This post deserves hundreds of recommendations!