Question

Paraphrase below please!

-----------------------------------------------

An increase in the payroll tax would reduce the value of Social Security for younger workers relative to older workers. Older workers would benefit from having a more secure plan, and they wouldn’t have to pay in at the higher rate for very long. Younger workers would have to pay the higher rate over many more years, and their benefit calculation would not increase (because the increase in taxes is meant to keep the current system solvent, not to increase benefits). The very-highest-earning workers would not be harmed as much as lower earning workers because the payroll tax is not imposed on earnings above $106,800 (currently); however, their payroll tax burden would increase. Women generally benefit more from Social Security because they live longer than men. They are also more likely than men to have interrupted their careers to raise their families, so they tend to pay in less. They are also more likely to receive benefits as a surviving spouse. All these factors would continue to exist with a higher tax rate. The higher tax rate would be borne by the employed, not by those who receive benefits because of their survivor spouse status.

Answer 1

This article discusses the impact of increase in payroll tax on social security. Older workers would benefit because they do not have to pay the higher payroll tax for very long. Younger workers would have to pay the higher tax for a longer period and their benefit calculation will not increase proportionately. The higher payroll tax is for keeping the system solvent and not to increase benefits.

The lower paid employees will be burdened with the higher payroll tax compared to the very-highest-earning workers. The payroll tax is not levied on earnings above $106,800 (currently).

Women will benefit a great deal more since they live longer than men and are likely to have interrupted careers which means they contribute less. They also enjoy the benefits of a surviving spouse. The higher tax rate burden falls heavily on the employed than those who enjoy the benefits.