Social Security 's Optimal Solution

1437 Words Nov 4th, 2015 6 Pages
Social Security’s Optimal Solution At the forefront of many political and economic debates is social security’s insolvency. The number of social security beneficiaries compared to the number of workers is expected to rise 10% over the next 20 years (National Academy of Social Insurance). Specifically, solutions on how to find funding for the program from current workers are being discussed. Concerns about funding social security are not unknown. The unknown is how, if at all, social security can continue to remain solvent. While economists have proposed many reforms, funding social security through an asset tax on working age individuals is the best answer to the social security financing question. Funding the social security retirement program through an asset tax is the optimal solution because it legislates a more redistributive program that provides retirement income to the individuals who need it most, without the adverse effects of a modification to the current Federal Insurance Contributions Act (FICA) tax. One issue with the payroll tax that often goes unnoticed is a worker’s declining taxable income throughout their career. A tax on assets would counteract this dilemma by providing tax revenue that ensures sufficient funding for social security. While individual income peaks at around age 40, individuals’ total assets peak at retirement (age 65) (Kurdna et al. 112, 116). By taxing assets, the funding for social security would be at an…
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