Why not up the Social Security payroll tax?

What we say and what we do are frequently two very different things. Following is a good example. My question is does this imply that at least this demographic is unable to act in its own best interest and that it needs to be forced into prudent action?

man_decreasing_net_income_lg_clrThere is nothing currently stopping these folks from automatic saving on a tax-favored basis. So if they are willing to trade some current income for a more secure future, what’s stopping them?

This is a very real problem, not only for these individuals, but for society as a whole. What to do, what to do?

Does the solution include bumping up the Social Security payroll tax along with the ultimate benefit? Forced savings for an undisciplined society? To do that first we have to increase the current level by about 2.66% just to keep the program solvent and then we need to figure out how much more to increase it to fund higher benefits long-term.

So, we are talking about a total payroll tax of about 20% shared equally between employer and worker … the amount of wages to be taxed yet to be determined🤑 Is that enough?

Except from Bloomberg Personal Finance:

If you had to choose between the two, and you’re between 18 and 34, odds are you’d trade some of your pay today for greater retirement security in the future, a new survey says.

It seems odd. Aren’t young people loaded down with student loans and plagued by expensive housing? Some 65 percent of millennials surveyed by EY (aka Ernst & Young) and the Economic Innovation Group said “they did not make enough money to cover expenses or are living paycheck to paycheck.” And aren’t they focused on experiences—and not the experience of living in drudgery while they save all their pennies for old age?

Yes and yes. Still, 60 percent of those 18 to 34 in a Willis Towers Watson survey of more than 5,000 workers said they would forgo some of their pay if it meant a more secure retirement. That’s up from 42 percent when the same survey was taken in 2009.


  1. There are many studies that confirm people know they should be saving more but, knowing that, they still fail to take action. There are other studies, in behavioral economics, where people say they will act to save more, but never take action.

    Have yet to figure out why those of us who are disciplined savers should be taxed more because others do not value/prioritize retirement.

    Social security was always intended to offer a base level of income replacement. Since we have failed to secure sufficient funding for a base level of income replacement, people want to do what – expand a failed process?

    For the past 80+ years, where time after time Congress has approved improvements that exceed projected funding (all the way back to the very, very first Social Security benefit recipient, Ida Mae Fuller in the early 1940’s), what is in place to ensure that Congress won’t take similar action in the future? It seems absolutely stupid to suggest that something has changed, where clearly it hasn’t. Remember, both Trump and Clinton assert that no changes are needed (and Hillary wants to expand benefits, I suspect by funding more through general revenue, aka tax the rich).


    1. Let’s face it. The majority do want to be taken care of. Everyone wants individual freedom to do what they want while they also want others to take responsibility for them.


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