About | HeinOnline Law Journal Library | HeinOnline Law Journal Library | HeinOnline
LOG IN
LOG IN

40 Tax Features 1 (1996)

handle is hein.tera/taxfeaturs0040 and id is 1 raw text is: TAX FTON FOUNDATION Due to the Blizzard of '96, this news- letter was a week late getting off the press. We apologize for any inconve- nience this has caused our readers. TAX January 1996 Volume 40, Number I Social Security a Bad Deal for Baby Boomers Chilean-Style Opt-Out Plan Would Enrich Investors Most members of the baby-boom generation - those people born between 1946 and 1964 - can expect to lose money on Social Security when it is viewed as a Chart 1: Annual Retirement Income for Average-Wage Couples: Social Security Program v. Hypothetical Private Annuity $120,000 $100,000 $80,000 $60,000 $40,000 $20,000 $0 2012 2015 2019 2023 2027 2031 Retirement Year Source, Tax Foundation, retirement investment. In fact, says a newly published report by the Tax Foundation, the negative returns will almost certainly become worse if lawmakers enact traditional reforms to keep the Social Security system from going broke in the year 2029. In his Special Report titled Social Security: A Bleak Outlook for Baby Boomers, Senior Economist Arthur P. Hall observes that policymakers wrestling over how to save the floundering Social Security trust fund must avoid traditional approaches, such as increased payroll taxes, reduced benefits, or postponing the eligible retirement age. Such reforms will make Social Security an even worse deal for baby boomers-and the generations that follow them-because they each have the effect of raising the cost of Social Security benefits, notes Dr. Hall. The only productive alternative, he says, may be to break with tradition and implement some type of plan which permits taxpayers to opt out of Social Security. One way to understand the quality of the baby-boom generation's Social Security investment is to compare baby-boom couples' expected annual after-tax Social Security benefits with a hypothetical after-tax annuity that they could have purchased with their lifetime employer/employee payroll taxes. Dr. Hall concludes that low-, middle-, and high-income couple of that generation would have been much wealthier if their payroll Social Security continued on page 6 A New Tax System and Kitchen Table Economics for America Senator Phil Gramm (R-Texas) 4-5 I FRNT

What Is HeinOnline?

HeinOnline is a subscription-based resource containing thousands of academic and legal journals from inception; complete coverage of government documents such as U.S. Statutes at Large, U.S. Code, Federal Register, Code of Federal Regulations, U.S. Reports, and much more. Documents are image-based, fully searchable PDFs with the authority of print combined with the accessibility of a user-friendly and powerful database. For more information, request a quote or trial for your organization below.



Contact us for annual subscription options:

Contact Us

Already a HeinOnline Subscriber?

Log In

profiles profiles most