Lifted from comments by Dale Coberly…
This year’s Social Security Trustees Report seems to be late as usual.
But this is the LAST year that a gradual increase in the payroll tax can begin and still solve some of the less understood problems of the projected shortfall in SS funding: This is mostly that a gradual increase starting now preserves the Trust Fund at it’s current level… meaning the Congress doesn’t have to find the money to pay back it’s debt TO Social Security. The interest from that Trust Fund will keep the needed tax increase about 1% smaller than it otherwise will need to be. And the needed increase of one tenth of one percent per year will eliminate the projected “actuarial” shortfall entirely.. and that should eliminate the “sky is falling” argument of those who want to destroy Social Security.
Trouble is that neither the Left nor the Right are interested in actually solving the SS shortfall. The Right wants to kill Social Security by calling it welfare. The Left wants to kill Social Security by turning it into welfare.
After this year, SS can still be “saved” by the one tenth percent per year increase in the payroll tax, but will not have the advantages alluded to here. Because the Trust Fund is being drawn down, the needed tax rate to prevent an actual shortfall in about 2030 will rise fairly rapidly. If nothing is done, the tax rate would need to rise about 2% all at once in about 2030 or so. This would not be a real burden to people even at that, but they will see it as such… be told to see it as such… and the bad guys will seize the opportunity to cut benefits, raise the retirement age, and even “tax the rich” as the first step to turning it into welfare as we knew it and guaranteeing that event he honest rich — who currently are NOT burdened by SS – wiil be burdened by it and join the campaign against it.
Even raising the tax rate about 1 and a half percent now would solve the projected shortfall for the rest of the century. This solution is objected to by those who want to confuse you because it would leave a need for another “significant” tax raise in 2093. That raise would be about one half of one percent.. at a time when wages will be more than 100% higher than they are today. I think we can leave that problem to those who will face it. It’s not my favorite solution, but those who tell you we must “solve the SS problem once and for all” are hoping you are stupid enough to think they are saying something sensible.