Raise the payroll tax at current taxable wage levels by 4% on employers and the problem is solved.
According to the Committee for a Responsible Federal Budget Social Security Reformer tool the program will be sustainably solvent for the next 75 years and beyond due to a growing trust fund, although 5% of the gap between spending and revenue remains in the 75th year.
What are the possible consequences? Higher prices in some areas, perhaps minor cutbacks in 401k matches in some cases, possibly some lower wages in some areas, minor reductions in employment are possibilities, so what?
If there is a minor impact on future wages, what has resulted is a form of forced savings.
Nothing else has to change, but additional minor changes could allow for modest benefit increases if wanted.
Employers have either not offered or have been trimming back retiree benefits for years. This is simply leveling the playing field.
And, importantly, the reductions in wages and benefits won’t be “fair” or “equitable”, but will disproportionately impact lower wage workers and those who have family health coverage. Perhaps it is long past time to rationalize company spending on health care, so, it could be an interesting change, watching it ripple through the total rewards package over a period of years.
And, of course, your right, some people might lose their jobs, but so what? Who cares about those folks, anyway? As they say, it is a recession when YOU lose your job, but a depression when I lose mine.
Dwayne has a very good point about adding on to employer costs.
The 75 year spending assumption is a moving target and I consider it to be more of a pipe dream. If we are going to go long on projections, the 2022 report used an ongoing shortfall of 3.54% of taxable payroll beginning in 2034 and probably is moved up to 2033. There is no need to increase payroll taxes until then. If the projection is accurate, less than 4% would be needed of taxable payroll. Paying more today is a dream come true for the current set of politicians in DC. They get extra money to spend today and we get an IOU. Not a good swap.
People just don’t understand “employee total compensation”. I didn’t understand it myself until I went through my first union contract vote and it was explained to me. An employee’s cost isn’t just their hourly wage. It is the employer’s portion of the employees taxes, medical, pension, meals, travel reimbursements, safety equipment, and whatever else the employer pays for. The W-2 forms you get in January cost money to create too. It could be between 20-40% more than the hourly wage depending on the job and industry.
I think if companies put a line item on peoples paycheck of what the employer pays on their behave that workers would be surprised. Companies only have so much money for labor and they WILL find a way to cut labor costs even if they have to ship the jobs overseas. Sometimes it is cheaper to have a product shipped half way around the world than to pay the labor to make it in the US in order to make a profit. If you don’t do that someone else will and undercut your market share.
So if you tax the employers more, the money will come from somewhere else, most likely the employee’s wages and benefits.