But don’t we have to cut “entitlements”?
by David Atkins
Via Kenneth Quinell at Crooks and Liars:
In the 2011 Melbourne Mercer Global Pensions Index, the U.S. was given a middling grade of “C,” along with France, Singapore, Brazil, Poland and Germany.
Ken Quinnell quotes the Melbourne Index, which points out that pension system could actually use better funding:
A country given a C has “a system that has some good features, but also has major risks and/or shortcomings that should be addressed,” the report states. “Without these improvements, its efficacy and/or long-term sustainability can be questioned.”
The United States ranked close to average among 16 countries in adequacy of benefits provided and above average in sustainability, the likelihood that the system can maintain the benefits in the future. It fell short, however, on a sub-index focused on the private sector pension system.
The U.S. could take steps for a better score, the report said, including raising the minimum benefit for low-income retirees, improving benefits vesting, and further limiting access to funds before retirement.
Of course, the best way to do this would be to raise the payroll tax cap. Back to Quinnell:
SEIU reports that the upper one percent of Americans have already stopped paying Social Security taxes for 2012 because of a cap on what earnings pay into the system. Currently, once someone reaches $110,100 of income they have paid Social Security taxes on, they pay no more into the system for the year. Eliminating this cap is widely seen as the easiest and fairest solution to shoring up the future of Social Security. SEIU has an action opportunity for citizens to contact Congress and demand they scrap the cap.
Instead, we’re being told by members of both parties that we have to “cut entitlements.” Since clearly doing something about the insanely low tax rates and extreme income inequality for the top 1% is out of the question for some reason.
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