Social security is not in deficit spending at this time, but will require other tax sources by 2015 or it will be paying out more in benefits than it receives in the payroll taxes that fund the program.
And if we set aside the pay-as-you-go nature of Medicare and pretend it really is an insurance program, your payroll tax contributions will end up covering only about one third of your personal tax-financed spending over your lifetime.
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The program was financed by a payroll tax of 2.9% on all wage earners, half paid by employee, half by employer.
The Social Security trust fund, together with payroll taxes, is sufficient to cover program benefits for more than the next 20 years.
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But some Democrats are wary of any change to the payroll tax, which funds the Social Security program.
Chowchilla already has axed more that one-third of the municipal payroll while cutting such services as a swimming program.
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Some Republicans prefer the payroll tax reduction to the Making Work Pay program because it goes to everyone who works, regardless of income.
That is because the personal accounts finance so much of the future benefits of Social Security that future deficits between continuing payroll tax revenues and continuing benefit obligations of the program are eliminated entirely.
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Thus, the program could be funded with a 1% payroll tax.
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The program also bars the IRS from auditing the taxpayer for payroll tax issues for those prior years.
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What that means then is, is that among the options that are available to us is, for example, the payroll tax cut, which might not be exactly the kind of program that I would design in order to boost employment but does make a difference because it puts money in the pockets of people who are then spending it at businesses, large and small.
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But this estimate excludes unspecified increases in the Social Security payroll tax that would almost inevitably be included in a reform of the retirement program.
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