Some recent comments about Social Security give me concern about the future for working Americans in the near future. And despite the fact that recent articles focused on the (legal) changes in SS benefits, only in the final paragraph was this statement:
"The Social Security Administration also announced Tuesday that 9.9 million workers will face higher taxes next year because the maximum amount of Social Security earnings subject to the payroll tax will rise from $87,900 to $90,000. In all, an estimated 159 million workers will pay Social Security taxes next year."
So while people continue to complain about the low *increase* in benefits and promise not to raise the retirement age, the true effect is that millions more will pay 6% and their employers will pay 6% on an additional $250+ per year.
The reality is that people been paying into a system of transfers from workers to retired. It will only increase in the future without significant reform.
Posted by Jeremy Showalter at October 19, 2004 05:57 PMIf you're interested in the subject, the Kansas City Federal Reserve branch just published a research paper on the effects of the Baby Boom generation's impending retirement on the financial markets:
http://www.kansascityfed.org/PUBLICAT/SYMPOS/2004/pdf/Poterba.Paper.0810.pdf
Thanks! Very interesting paper. Interesting to think about whether or not that portion of the population could move markets simply because of where they're at in the lifecycle of investing.
Posted by: Jeremy at October 19, 2004 11:50 PMJust a note...
J, the article you cite says " an estimated 159 million workers will pay Social Security taxes next year"
But according to the Bureau of Labor Statistics latest's numbers ( http://www.bls.gov/news.release/empsit.nr0.htm - 10/08/2004), the total labor force is approximately: 147,681 k
Are they trying to say that the labor force is going to grow by 8% over the next year?
Where is John Galt when we need him?
Posted by: KC at October 20, 2004 07:34 AM"Who is John Galt?" ;)
I think he's holed up with Dabny (or whatever her name was) somewhere. Remember, he doesn't care about us, only himself. Selfishness is a virture, right?
Posted by: Jacob at October 20, 2004 12:41 PM
No, I don't think selfishness is a virtue.
I think "leaving me alone" is a virtue. If people worked on the premise that most people just want to be left alone - defined as freedom from harassment, freedom from burdensome laws & taxes, and the freedom to fail or succeed as we each see fit - then we'd all be *much* better off.
Posted by: KC at October 21, 2004 08:12 AM