In our last Perspective, we warned that Baby Boomer retirement will drain Social Security? so deeply that, within 20 years, expenditures will exceed revenues by almost 30%. The gap will be unsustainable.
We must begin by admitting that there is no silver bullet, no magic solution. We will have to fashion a mix of policies, each one of which will require sacrifice. Some options are:
First, raise the retirement age above the current 67.
Secondly, raise Social Security taxes modestly, while
Thirdly, limiting benefit increases or capping benefits. Any further tax increases must be matched by stricter spending limits.
Fourthly, a more? radical proposal would eliminate -- or at least raise -- the income cap on Social Security taxes. Now, the 6.2% Social Security tax drops off for any income earned above approximately $118,000. At least 6% of income earners are affected, and a lot of income goes untaxed. Raising or removing the cap could generate a significant amount of revenue from the top 6% of income earners.
There are other reforms, but all reforms will require sacrifice. We know? that Americans will sacrifice, as long as the cause is good and the sacrifice is shared fairly.
Economists use the term equity. Social Security is a good cause, and we can fix it equitably. We can and should honor our social contract with each other.
I'm Bob Evans, and that's my perspective.
