Saturday, May 22, 2010

More ideas to fix social security: legacy tax, reduce spousal benefits, increase the top working years base

U.S. News and World Report has another list “12 Ways to Fix Social Security”, reprinted on Yahoo! fiancé, list here.

A couple of the more controversial proposals include a legacy tax to cover the expense of those who never paid in, back in the 1930s, with an extra tax on earnings over $106000.

Another bone of contention would be to lower spousal benefits.

Still another is to add in more working years (above the top 35), which would add in more years of zero for some people and lower benefits.

There is also a proposal for a 3 to 5 percent benefit cut for new beneficiaries starting in 2010. But there’s no mention of means testing for existing beneficiaries. Possibly that would be unwise given the enormous cost of long term care that is coming down the pike, where enormous savings and benefits are required to pay for them.

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