A Stitch in Haste

I left something out from my post yesterday about which dials, buttons and levers the government can fiddle with to address the Social Security crisis:

The Social Security Administration also announced Friday that 11.3 million workers will pay higher taxes next year because the maximum amount of Social Security earnings subject to the payroll tax will rise from $90,000 to $94,200 next year. In all, an estimated 159 million workers will pay Social Security taxes next year.

So, with not a single politician or bureaucrat lifting a finger, benefits increase and taxes increase, with no end in sight.

And remember: the claim that "paying more Social Security taxes simply means more benefits at retirement" is a flat out lie. The benefit schedule is specifically designed to be highly progressive -- a 4.7% increase in your Social Security taxes earns you far less than a 4.7% increase in your benefits. In fact, the rate of return of those additional contributions can easily be negative.

And don't forget that employers must match those higher taxes, which means some combination of lower wages to employees, higher prices to customers, or lower returns to investors. (Those who are self-employed know this all too well.)

Anyone still care to suggest that there is no crisis?