According to Business Insider, the first batch of Baby Boomers starts turning 65 in 2011, which means they will start collecting Social Security benefits. Baby Boomers have spent years working and paying Social Security taxes, earning up to four credits per year based on net income and accumulating credits over lifetime. Even if they did not work, some Baby Boomers can collect benefits based on their spouse’s work record.
Lawmakers on Capitol Hill worry that groups such as Baby Boomers will tap out Social Security’s trust fund. Republicans are pushing for reforms including entitlement changes. Liberals feel the Republicans have no lower-tax, lower-deficit alternative other than cutting Social Security. Robert Pozen, a finance industry executive and advocate of Social Security privatization, told liberals what their positions should be on Social Security.
Pozen is for raising the cap on earnings subject to the payroll tax and slowing the growth of benefits for higher-wage workers. He also believes that our life expectancy will rise due to advances in medical therapies.
A rebuttal to Pozen’s proposal comes from a conservative Dean Baker. Baker’s proposal is to leave benefits mostly unchanged for the lowest wage earners while reducing benefits and raising the retirement age for middle income workers. He believes such a move would make Social Security more progressive. The bottom 98 percent of taxpayers will have no income tax changes, while the marginal tax rate is raised to 50 percent on incomes above $250,000. Individuals making over $10 million would have a zero tax bracket.
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