Why Strengthening Social Security Matters to Small Businesses
RSS Issue FeedBusinesses pay for half of the Social Security system through their payroll taxes. Unfortunately, that burden has grown significantly over the years—payroll taxes have been raised 22 times! Now, with the Social Security system on the brink of insolvency, the country faces a choice. If the problem is addressed the same way it always has been, your business could be looking at yet another payroll tax hike.
In the early years of Social Security there were 16 workers to every 1 beneficiary, and most beneficiaries did not live long past the age of 65. As a result, each worker paid about $900* per retiree. Today, there are just over 3 workers to every 1 beneficiary, and most people live many years past 65. As a result, each worker pays about $4700 per retiree!
You know that labor cost is one of the greatest challenges any business faces. Payroll taxes only add to the burden. Yet if the Social Security system is not strengthened now, payroll taxes will have to be increased by 1.89 percentage points—over a 15% increase—to pay for the promised benefits. And that rate would have to be held until 2078.
There is a better way. Transforming the system to include real savings, in voluntary personal retirement accounts, strengthens the Social Security system without raising payroll taxes.
Why Strengthening Social Security Matters to:
*All dollar amounts are adjusted to 2004 dollars.
