If an employers' Social Security contribution rises, as it does now every year, he will either pass out smaller raises to his workers or increase the price of his products, or both.
Capuano questions the purported budget surpluses, noting Social Security's contribution, and points to "emergency" spending measures that circumvent spending caps.
The commission members who opposed privatisation wanted to underpin the solvency of the Social Security trust fund by raising contribution rates.
The beauty of it is not its sound numbers but its boldness: The entire portion of an employee's contribution to Social Security and Medicare (7.65%) would go into the individual's private retirement and health accounts.
Structured this way, Social Security seems to be a forced 401k-type contribution to a lousy performing asset class.
FORBES: Fixing The Nagging Problem Of Social Security -- Part 2
Most proposals for creating a defined-contribution alternative to a state pension plan or Social Security use an IRA or 401(k) model.
FORBES: How Three Texas Counties Created Personal Social Security Accounts and Prospered
State and local governments that are currently outside of Social Security are giving serious consideration to shifting to a defined-contribution plan, as Utah has recently done.
FORBES: How Three Texas Counties Created Personal Social Security Accounts and Prospered
With the shift from defined-benefit plans to defined-contribution plans, and the uncertain future of social security, boomers are on their own when it comes to financing retirement.
Drawing from international experience, the World Bank suggested that China could raise contribution rates, or use general revenues or dedicated social security taxes to cover contingent liabilities, in addition to direct transfers of state-owned assets.
Not to Milton Friedman, who called the contribution scheme needlessly regressive as part of his attack on Social Security.
The government could, for example, let the under-30s keep the 6.2 percent they contribute to Social Security while the government continues to take the 6.2 percent employer contribution.
FORBES: The Under-30s Should Demand an Opt Out of Social Security
Like Social Security, employees contribute 6.2 percent of their income, with the county matching the contribution (Galveston has chosen to provide a slightly larger share).
FORBES: How Three Texas Counties Created Personal Social Security Accounts and Prospered
Recently, Vanguard has begun urging people to contribute 12% to 15%, including the employer contribution, because of the stock market's weak returns and uncertainty about the future of Social Security and Medicare.
The bill empowers each worker age 50 and below with the freedom to choose a contribution to a personal savings and investment account equal roughly to half of the employee share of the Social Security payroll tax.
FORBES: Social Security Personal Accounts Are A Path To Prosperity
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