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1 Alex Durante, Social Security: Lessons for Reform 1 (2024)

handle is hein.taxfoundation/slsctyls0001 and id is 1 raw text is: *NTAX FOUNDATION Social Security: Lessons for Reform Alex Durante Economist September 2024 Key Findings • By 2035, the Old-Age, Survivors, and Disability Insurance Trust Fund, or the Social Security Trust Fund, will be depleted, and current payroll taxes will only be able to fund 83 percent of the scheduled bene- fits. • Absent any reforms, Social Security recipients would immediately face a 17 percent cut in benefits. • Past reform efforts, such as the 1983 amendments, have not been able to solve Social Security's long-term funding problem, which is due to a declining worker-per-retiree ratio that now stands at only 3-to-1 and is projected to fall further. • Reforms such as using price indexing instead of wage indexing to calculate benefits, raising the retire- ment age, using the chained CPI to adjust benefits for inflation, and raising the payroll tax cap would restore solvency to the system. • The current Social Security system crowds out private saving and harms young workers and new en- trants to the labor force. • Policymakers should look to other countries for inspiration, including Australia, Singapore, Sweden, and Chile, which have all reformed their systems to encourage personal saving. The Tax Foundation is the world's leading nonpartisan tax policy 501(c)(3) nonprofit. For over 80 years, our mission has remained the same: to improve lives through tax policies that lead to greater economic growth and opportunity. TAX FOUNDATION 1325 G STREET, NW, SUITE 950, WASHINGTON, DC 20005 202-464-6200 1 taxfoundation.org