Saturday, January 29, 2005
Laurence Seidman (University of Delaware, Department of Economics) has published Social Security: What Now?, 106 Tax Notes 463 (2005), also available on the Tax Analysts web site as Doc 2005-283, 2005 TNT 15-24. Here is the abstract:
He contends that even if nothing is done, Social Security will face a problem, not a crisis, after 2042: a 27% cut in the monthly benefit that would still leave the benefit after inflation larger than today's benefit. To avoid that 27% benefit cut after 2042, he offers three recommendations to be implemented as soon as possible: tax payroll above the Social Security ceiling; gradually reduce the replacement rate for high-income earners; and gradually raise the age of full benefits and the age of early retirement by one year. To achieve a bipartisan package, he recommends considering optional individual accounts provided seven conditions described in his article are met.