The first aspect that needs to be changed in the current Social Security policy is the issue of life expectancy. As we speak, most of the payments made are based on the nineteen thirties and forties. At that time, many beneficiaries were expected to live up to an age of fifty five, however, this life expectancy has increased upwards and it is currently at seventy seven years. Experts agree that it would definitely make sense to include this age related issue in the process of making reforms. (Concord Coalition)
There are two major options which the US government can take to tackle this issue. They can either increase the amount of taxes being collected from social security contributors or they have the alternative of reducing the amount of benefits going to retirees. The latter proposals are based on the following interrelations
When life expectancy has increased, then it may be very difficult for the current crop of workers to meet the total social security payments. This is because beneficiaries must be paid social security for as long as they are alive and this means more payments. Additionally, if the amount of payroll contributions is not changed, then it may be inadequate to cover these costs.
In order to avoid extremities or the winner-takes-it-all approach, it is essential to split these costs between the two parties involved i.e. the social security contributors and the beneficiaries. ...
Additionally, they also need to involve the payroll tax contributors too. Half of the additional costs brought on by increased life expectancy can be covered by increasing payroll taxes so that no group will feel that they have been treated unfairly. (Cauthen, 38)
Dealing with historical debts
It has been noted by some researchers that not all workers in local and state institutions pay their taxes. This is one of the reasons that is causing the huge debt that has accrued over the past few years. In order to tackle this problem sufficiently, there is a need to impose mandatory taxation to this group. However, because implementing such a system on pre-existing workers would cause a lot of uproar and unfairness, it would be advisable to introduce that reform for every new worker that enters local or state departments and institutions. If these numbers are curbed, it is estimated that close to four million workers will be able to pay their taxes and this will greatly contribute towards eliminating that large debt that has been accumulated by past generations.
Another manner in which the US government can handle this issue is by imposing a form of legacy taxes on high earners. (Springs, 9)
As we currently stand, there is a maximum taxable amount and those who make more than this amount are not obliged to pay taxes depending on how much more they earn. This approach is creating a serious loophole and if left unchecked could lead to greater levels of historical debt. These higher earners can be informed that they are contributing towards the historical debt that has accumulated over the past few years. Additionally, the rates may be determined by how much more a contributor is earning above the maximum taxable income.
Besides the latter