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Publication Date: December 2007
Publisher: Tax Policy Center
Author(s): Adam Carasso; Jonathan Barry Forman
Research Area: Government
Keywords: Elderly; Retirement/Pensions; Tax Policy; Tax Distribution and Economic Trends
Type: Paper
Abstract:
The inadequacy of the current U.S. public and private pension systems may warrant the establishment of a universal pension system (UPS), which would cover all workers?full-time and part-time?and require them to contribute at a level that can help provide them with adequate incomes when they retire. This paper develops options for a system of individual accounts to which, starting in 2007, each employee or self-employed worker would be required to contribute 3 percent of covered payroll (i.e., 3 percent of up to $97,500 in 2007). The UPS we describe would raise the total "replacement rate" for average wage men to 49.0 percent of final wages?provided Social Security is fixed?or 39.8 percent if not