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(c) 2016 Jon L Gelman, All Rights Reserved.

Sunday, November 24, 2013

Social Security’s Job

The Social Security system is an "unfair" benefit distribution plan according to some authorities. Compounding this issue is the patchwork of workers' compensation system that all seem to apply different rules for setoff f benefits from lifetime benefits as well as COLA modifications. Choosing the "right" jurisdiction to file a workers' compensation total disability claim can make all the difference in the world for the amount of benefits an injured worker receives during his or her lifetime. Today's post was shared by Steven Greenhouse and comes from economix.blogs.nytimes.com

Ratio of Social Security benefits to Social Security taxes paid, by race or ethnicity and year.
Ratio of Social Security benefits to Social Security taxes paid, by race or ethnicity and year.
Source: The Urban InstituteRatio of Social Security benefits to Social Security taxes paid, by race or ethnicity and year.
Does Social Security need to be fixed?
As Democrats and Republicans grapple over how to reduce the government’s budget deficit in the face of rising costs for pensions and health care, whether Social Security should be touched remains one of the most controversial topics in American budgetary politics.
But something big is missing to the debate over the finances of what is still the largest component of the social safety net: an understanding of how well it does its job.
When you peek under the hood, it doesn’t always look so great. Indeed, this supposedly great redistributive program — which uses a broad tax on all workers to protect the elderly from poverty — exhibits some fairly stark regressive features.
One well-known regressive feature comes from the rule that benefits must be annuitized, paid out over time in monthly installments rather than as a lump sum. This means that richer people who tend to live longer will get a bigger benefit than poorer people with shorter life spans. Survivor benefits redistribute money from the singles — who don’t get the benefit — to the married, who do.
Eugene Steuerle, Karen Smith and Caleb Quakenbush of the Urban Institute in Washington just discovered another unsuspected regressive...
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