Economists Back Higher Burden on Wealthy to Fix Social Security Before 2032 Insolvency
Updated
Updated · Fortune · Oct 5
Economists Back Higher Burden on Wealthy to Fix Social Security Before 2032 Insolvency
1 articles · Updated · Fortune · Oct 5
Summary
Romina Boccia and Teresa Ghilarducci converged on one point: Americans at the top will have to absorb the biggest hit as Social Security nears trust-fund insolvency in 2032.
The split is over how the wealthy should pay — Boccia favors smaller benefits for affluent retirees and a flatter anti-poverty benefit, while Ghilarducci backs higher taxes, including lifting the payroll-tax cap.
A 12.4% payroll tax now funds current beneficiaries rather than individual savings, a structure Boccia says burdens younger workers, while Ghilarducci argues the program’s inflation-indexed lifetime benefits still do what private retirement markets cannot.
Kent Smetters of Penn Wharton said a more privatized system could boost growth but would still impose long transition costs because "somebody has to pay."
Public opinion appears closer to Ghilarducci’s side: an AARP/NASI survey found 85% support maintaining or raising benefits even with higher taxes, and 73% backed taxing income above $400,000.