罗森第九版英文《财政学》课件chap01132页PPT

The Greatest Generation
benefits
Work
contribute
The Baby Boom Childhood Generation
Baby Boomers
RetirealsaondcoGnDetrniebaXudtianrge to
benefits their own
retirement
administrative costs • Income Redistribution • Improve the Economic Status of the Aged
11-4
Fully Funded Plan
Period 1 Period 2 Period 3 Period 4
The Greatest Generation
both employee and employer – Self-employed
• 12.4% • 2019 Medicare Tax rates
– 1.45% on both employer and employee with no earnings ceiling • Why not fund Social Security through general tax revenues?
• Earnings test and taxing benefits – Benefits reduced $1 for every $2 earned above $14,160 – Individuals losing benefits may have later benefits increased – Up to 85% of benefits taxed for recipients with income above a base amount ($25,000 for single and $32,000 for married taxpayers.)
percent a month for first 36 months preceding normal retirement age – Late retirement – benefit increased 8% a year
11-11
Adjustments
• Family Status – +50% for spouse or dependent child – If covered worker dies spouse receives 100% of worker’s benefit or spouse’s own benefit (whichever is higher) – Divorced spouse married at least 10 years gets spouse benefit if not remarried while covered worker alive
• Normative evaluation
11-17
The Social Security Trust Fund
Worker
Trust Fund
Retiree
• Social Security and National Saving • Budget Treatment of Social Security
Rceutrrierent
workers
Dead
benefits
Generation X
Unborn Childhood Work
contribute
Retire
benefits
11-6
Today’s Partially Funded System
Period 1 Period 2 Period 3 Period 4
(1+r)B F S
I0 - S
M
I0
Present consumption (c0)
11-20
Utility-maximizing Choice of Present and Future Consumption
11-10
Adjustments
• Annual inflation adjustment • Age at which benefit is drawn
– Normal retirement age – Early retirement – benefit reduced 5/9th of one
CHAPTER 11
McGraw-Hill/Irwin
Social Security
Copyright © 2019 by the McGraw-Hill Companies, Inc. All rights reserved.
Social Security Expenditures
(1939-2019)
400 200
0 -200 -400 -600 -800 -1000
One-earner Couple
Year Cohort Turns 65
Low Average High Max
Low Average High Max
Tw o-earner Couple 400 200
0 -200 -400 -600 -800
11-19
Budget Constraint for Present and Future Consumption
Future consumption (c1)
N I1 + (1+r) S
I1 I1 - (1+r) B
D At endowment
(1+r)S point consumer neither saves nor B borrows
11-12
Financing
• FICA (Federal Insurance Contribution Act) • 2019 Social Security Tax rates
– Employee – 6.2% (OASI - 5.6%, DI - .6%) of first $102,000 of earnings on
See C. Eugene Stueuerle and Jon M. Bakija [1994] for original tables and methodology.
All values expressed in 2019 dollars.
Thousands of 2006 Dollars 1940 1960 1980 2000 2020 2040 2060
11-8
Benefits
• How to calculate benefits
– AIME (Average Indexed Monthly Earnings) – average monthly earnings in 35 highest paid years
• Wages indexed for inflation • Ceiling on AIME – up to tax ceiling
The Baby Boom Generation
Work
contribute
Childhood
Retire
Dead
benEeafciths generation’s benefits based on
dWepwoosorikrtksinitgmliafedepRldueusrtiinrge
conatcricbuumteulated inbteenreefsitts
11-9
Benefit Structure
If AIME < $711 PIA = .90*AIME If $711< AIME <$4288 PIA = .90*$711 + .32*(AIME - $711) If AIME > $4288 PIA = .90*$711 + .32*($4288-$711) + .15*(AIME - $4288)
Year Cohort Turns 65
Low Average High Max
11-16
Other Distributional Issues
• Redistribution within a generation
– Differences by earnings – Differences by lifespan – Differences by living arrangements – Differences by number of earners in the family
Nb * B = t * Nw * w or B = t * (Nw/Nb) * w
• Ida Mae Fuller
11-14
Ida Mae Fuller
11-15
ቤተ መጻሕፍቲ ባይዱ
Social
Security
Wealth:
Representative Individuals
Source: Updated tables, furnished by C. Eugene Steuerle and Adam Carasso, 2019.
Thousands of 2006 Dollars 1940 1960 1980 2000 2020 2040 2060
Thousands of 2006 Dollars
400 200
0 -200 -400 -600 -800 -1000
Single Male
Year Cohort Turns 65
benefits
Work
contribute
The Baby Boom Childhood Generation