Kerby Anderson
Some of the challenges the U.S. will face in the future will exist no matter who is elected in November. But it is also true that sometimes one candidate or policy can make a bad problem worse. The continued funding of Social Security is a good example.
The Congressional Budget Office (CBO) declared that to fund Social Security, the payroll-tax rate will have to be raised 35 percent. The CBO estimates that revenue for Social Security will remain stable for the rest of the century. But Congress will have to raise the payroll tax rate from 12.4 percent to 16.7 percent (a 35 percent increase).
However, the revenue for Social Security might not be enough if Donald Trump is able to get legislation through Congress that would eliminate the income tax on Social Security benefits. The CBO estimates that the payroll-tax revenue would decline over time but assumes that would be offset by an increase in income-tax revenue from beneficiaries.
On the other hand, Kamala Harris would like to increase Social Security benefits. Since the CBO assumes that revenue would be relatively stable for the rest of the century, any increase in benefits would make Social Security insolvent, unless Congress decides to increase the Social Security payroll-tax by more than 35 percent.
The other variable is Congress. It is questionable whether newly elected members of Congress would be willing to increase the payroll-tax rate. Their opponent in the next election would accuse them of raising taxes on the American people.
As you can see, who you elect to the presidency and who you elect to Congress will determine the financial future of Social Security. Unfortunately, they will probably decide to do nothing, and “kick the can down the road.”
This post originally appeared at https://pointofview.net/viewpoints/social-security/?utm_source=rss&utm_medium=rss&utm_campaign=social-security
