What are the goals of Social Security reform?
• Social Security reform should accomplish three things: • Make Social Security solvent and sustainable for the future. • Improve the return on investment for those paying into the system. • Provide greater retirement security for those who rely on Social Security most. What are the possible solutions? • We could raise taxes, cut benefits, or figure out a way to establish a real trust fund. We can also do some of all three. • o Raise taxes: Social Security is currently funded by a 6.2% payroll tax for employee & employer and a 12.4% tax for those self employed. That tax applies only to the first $106,800 a person earnsthis cap also limits the total Social Security benefit a retiree can collect. Some of the Social Security shortfall could be covered by raising the tax rate or lifting the cap. • Cut benefits: Policy makers have proposed numerous ways to trim Social Security benefits or slow their growth in the future. Those proposals include means testing, indexing benefits to inflation
