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Introduction
Ensuring that aging people have a decent life of the required quality is an essential part of the governments function. However, in light of the recent developments in the global economic and financial field, as well as on local levels, some of the present frameworks for supporting the aging population may become less efficient. The Old Age Survivor and Disability Insurance (OASDI), or Social Security, has been facing certain changes recently due to the increase in spending and the drop in revenue currently predicted for the future (McKeever and Walsh 74). Therefore, reconsidering the existing Social Security framework is highly recommended to ensure that aging people are provided with the necessary support and assistance. Specifically, by increasing the Payroll Tax Cap and raising the retirement age, the government will be able to receive a greater amount of financial resources for addressing the current problems with the Social Security and the retirement opportunities that lower and middle lower class citizens have.
Reasons for the Concern
The situation observed currently in the American social security context creates a rather dubious environment due to the loss of financial opportunities for retiring people and the drop in the amount of resources for their financial support. Although the recent account of the available resources for the retired in the U.S. have been mostly positive, the presence of certain disparities remains an issue. Specifically, the concerns regarding the financial support need to be outlined. According to recent studies, most American citizens have insufficient amounts of retirement savings ( 2020 Payroll Taxes Will Hit Higher Incomes ). The observed trend can be attributed to the problems with employment that can be currently observed in the U.S. labor market. Therefore, financial concerns are likely to emerge in the future as the American citizens that are currently approaching the retirement age will have to seek state support and will have to face the issue of insufficient funding (Bagchi 4). For this reason, additional strategies for managing the crisis will have to be outlined.
Solutions
The rise in the Payroll Tax Cap appears to be the most legitimate solution to the current concerns regarding the decreasing opportunities for retiring and retired people. Indeed, although the number of people that can afford a tax cap of $132,900 is quite low in most communities across the U.S., ensuring that they submit the taxes that align with their annual earnings is central to the increase in the amount of funds available for the retired population ( 2020 Payroll Taxes Will Hit Higher Incomes ). Therefore, increasing the Payroll tax Gap will allow accumulating a larger amount of resources that would, later on, be used to support the aging population.
It should be acknowledged that the solutions above are quite contentious for a number of reasons. Specifically, the argument concerning the rise in the retirement age might be seen as an endeavor to avoid offering people the retirement money that they have earned fairly. Indeed, to some extent, the specified solution appear to be slightly contradictory to the current demands of the aging population. However, on closer inspection, the opportunities for expanding the range of financial resources offered by the government are quite scarce, and the rise in the retirement age will allow accumulating the necessary amount of money to provide to thee target demographic. While the solution in question is not ideal, it will allow supporting both the retired community that is presently facing multiple financial issues, and the younger generation, which will have a greater amount of funds from the government as they retire in the future.
One could argue that the introduction of the Payroll Tax Cap is unreasonable given the recent crisis and the resulting drop in the revenues of large companies. Therefore, increasing the Payroll Tax Cap may result in the aggravation of the economic conditions in which multiple entrepreneurs presently have to survive (Bagchi 2). However, the specified change will only affect the people whose revenues are above the set amount of money, which suggests that the proposed solution will still work even in the current context of severe economic complications. Thus, the application of the proposed two interventions will help to solve the problem of the social security retirement fund system.
Conclusion
An increase in the retirement age, as well as a rise in the payroll tax cap, will allow the government to receive more funding to support the retired population. Specifically, the main reason behind a rise in the payroll tax cap can be summarized as the necessity for people with extraordinarily high revenues to contribute a greater number of funds to the Social Security fund. Indeed, given the current state of the U.S. wealth distribution framework, the number of people who can pay the tax payroll of $ 132,900, is quite sizeable. However, the specified amount of money is not eligible for taxation, according to the existing regulation. The specified legal provision seems highly unfair, particularly, for the people belonging to marginalized and disadvantaged communities, which have to manage severe financial and economic issues. In turn, the increase of the retirement age and the Payroll Tax Cap will allow for a greater range of opportunities offered to the aging community.
Works Cited
2020 Payroll Taxes Will Hit Higher Incomes. SHRM.org, Web.
Bagchi, Shantanu. Can Removing the Tax Cap Save Social Security? The BE Journal of Macroeconomics, vol. 17, no. 2, 2017, pp. 1-27.
McKeever, Gráinne, and Tamara Walsh. The moral hazard of conditionality: Restoring the integrity of social security law. Australian Journal of Social Issues, vol. 55, no. 1, 2020, pp. 73-87.
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