Taxes
Income
Estimating the First Instance of Substantive-Covered Earnings in the Labor Market
Summary of Legislation of Interest to SSA Enacted During the 103rd Congress
During the 103rd Congress, some 400 bills of interest to SSA were introduced. Of these, nine that affect SSA programs were enacted. This note covers these enactments.
Child Tax Benefits: A Comparison of the Canadian and U.S. Programs
Family Social Security Taxes Compared with Federal Income Taxes, 1979
A Comparison of Social Security Taxes and Federal Income Taxes, 1980–90
A Comparison of Social Security Taxes and Federal Income Taxes
Federal Income Taxes, Social Security Taxes, and the U.S. Distribution of Income, 1972
This paper reports on estimates of federal income tax and Social Security tax liabilities of family units in 1972 and summarizes the methods used to make the estimates. Distributions of income both before and after subtracting those liabilities are shown. Several microdata files were combined using both "exact" and "statistical" matching of individual observations in the process of making these estimates.
State Income-Tax Laws on OASDHI Benefits and Contributions
Income-Tax Treatment of Old-Age Pensions and Contributions Here and Abroad
State Income-Tax Laws on OASDI Benefits and Contributions
Financing Public Welfare Programs
Employment and Earnings Under Old-Age and Survivors Insurance During the First Year of the War
Social Security
Workplace Injuries and the Take-Up of Social Security Disability Benefits
Workplace injuries and illnesses are an important cause of disability. States have designed their workers' compensation programs to provide cash and medical-care benefits for those injuries and illnesses, but people who become disabled at work may also be eligible for Social Security Disability Insurance (DI) and related Medicare benefits. This article uses matched state workers' compensation and Social Security data to estimate whether workplace injuries and illnesses increase the probability of receiving DI benefits and whether people who become DI beneficiaries receive benefits at younger ages.
The Evolution of Social Security's Taxable Maximum
Since its inception, Social Security has featured a taxable maximum (or "tax max"). In 1937, payroll taxes applied to the first $3,000 in earnings. In 2011, payroll taxes apply to the first $106,800 in earnings. This policy brief summarizes the changes that have occurred to the tax max and to earnings patterns over this period. From 1937 to 1975, Congress increased the tax max on an ad-hoc basis. Increases were justified by the desire to improve system financing and maintain meaningful benefits for middle and higher earners. Since 1975, the tax max has generally increased at the same rate as average wages each year. Some policymakers propose increasing the tax max beyond wage-indexed levels to help restore financial balance and to reflect growing earnings inequality, as workers earning more than the tax max have experienced higher earnings growth rates than other workers in recent decades.
Distributional Effects of Raising the Social Security Payroll Tax
This policy brief analyzes the lifetime tax effects of two options for addressing the Social Security system's long-range solvency by raising the Social Security payroll tax rate. The first, an immediate increase, would have raised the payroll tax rate from its current 12.4 percent to 14.4 percent in 2006; the second, a phased increase, would raise the payroll tax rate to 14.5 percent in 2020, and then to 16.6 percent in 2050. The brief also analyzes a comparative scenario in which the current tax rate is maintained through 2041 and then raised each year as needed to pay scheduled benefits. The lifetime taxes of people born 1936–2015 are analyzed using Modeling Income in the Near Term (MINT) projections. Results show that the longer a tax rate increase is delayed, the fewer workers are affected, but also the higher the increase in lifetime taxes for later generations. The results also show that both options reduce the cross-cohort variability in the ratio of benefits received to taxes paid.
The Research Contributions of the Center for Retirement Research at Boston College
This article reviews the research contributions of the Center for Retirement Research at Boston College over its 10-year history and their implications for Social Security and retirement income policy in three major areas: (1) Social Security's long-term financing shortfall, (2) the adequacy of retirement incomes, and (3) labor force participation at older ages as a means to improve retirement income security. The center has received substantial funding support from the Social Security Administration (SSA) in each area and has also successfully leveraged SSA's investment by attracting funding from other sources.
Social Security Administration's Master Earnings File: Background Information
The Social Security Administration (SSA) receives reports of earnings for the U.S. working population each year from employers and the Internal Revenue Service. The earnings information received is stored at SSA as the Master Earnings File (MEF) and is used to administer Social Security programs and to conduct research on the populations served by those programs. This article documents the history, content, limitations, complexities, and uses of the MEF (and data files derived from the MEF). It is intended for researchers who use earnings data to study work patterns and their implications, and for those interested in understanding the data used to administer the current-law programs.
Distributional Effects of Raising the Social Security Taxable Maximum
As of 2009, Social Security's Old-Age, Survivors, and Disability Insurance program limits the amount of annual earnings subject to taxation at $106,800, and this value generally increases annually based on changes in the national average wage index. This brief uses Modeling Income in the Near Term (MINT) projections to compare the distributional effects of four options for raising the maximum taxable earnings amount beyond its scheduled levels. Two of the options would raise this value so that it covers 90 percent of all covered earnings and two would remove the maximum completely. Within each set of options, the proposals are differentiated by whether the new taxable amounts are used in computing benefits. Most workers would not be affected by these proposals, but some higher earners would experience a substantial increase in taxes. Correspondingly, benefit increases are largely isolated to higher earners, although the return in benefits for taxes paid would also decline. Because the proposals are targeted toward high earners, Social Security's progressivity would increase.
A Progressivity Index for Social Security
Using the Social Security Administration's MINT (Modeling Income in the Near Term) model, this paper analyzes the progressivity of the Old-Age, Survivors and Disability Insurance (OASDI) program for current and future retirees. It uses a progressivity index that provides a summary measure of the distribution of taxes and benefits on a lifetime basis. Results indicate that OASDI lies roughly halfway between a flat replacement rate and a flat dollar benefit for current retirees. Projections suggest that progressivity will remain relatively similar for future retirees. In addition, the paper estimates the effects of several policy changes on progressivity for future retirees.
Estimating the First Instance of Substantive-Covered Earnings in the Labor Market
Financing Social Security 1939-1949: A Reexamination of the Financing Policies of this Period
Presented is an examination of the financing history of the U.S. Social Security system from the passage of the original law in 1935 up through the enactment of the 1950 Amendments to the Social Security Act. In particular, it focuses on the 1939 Social Security Amendments and the subsequent tax rate freezes enacted between 1939 and 1949. It examines the origins of these taxing policies and assesses the impact of the rate freezes on the long-range actuarial balance of the Social Security program during this period.
Comparing Replacement Rates Under Private and Federal Retirement Systems
This article presents a comparison of replacement rates for employees of medium and large private establishments to replacement rates for federal employees under the Civil Service Retirement System and the Federal Employees Retirement System. This analysis shows the possibility of replacement rates exceeding 100 percent for FERS employees who contribute 6 percent of earnings to the Thrift Savings Plan over a full working career. Private-sector replacement rates were quite similar for workers with both a defined benefit and a defined contribution pension plan.
Taxation of Social Security Benefits Under the New Income Tax Provisions: Distributional Estimates for 1994
Social Welfare Legislation, 1993
Proposals to Modify the Taxation of Social Security Benefits: Options and Distributional Effects
Policy Analysis Through Microsimulation: The STATS Model
Evidence on the Effects of Payroll Tax Changes on Wage Growth and Price Inflation: A Review and Reconciliation
The Social Security payroll tax rate is scheduled to increase by almost 1 percent for both employees and employers between now and 1990. One of the major elements of the recently adopted Social Security package was an acceleration of the timing of this increase. A number of economists have recommended that as an anti-inflationary policy scheduled increases be avoided or even that the current rates be rolled back.
Family Social Security Taxes Compared with Federal Income Taxes, 1979
A Comparison of Social Security Taxes and Federal Income Taxes, 1980–90
A Comparison of Social Security Taxes and Federal Income Taxes
Changing the Taxable Maximum: Effect on Social Security Taxes by Industry and Firm Size
The Macroeconomic Effects of a Payroll Tax Rollback
In late 1977, the U.S. Congress passed Social Security legislation that included a series of increases in the payroll tax. These increases, which began in 1979 and carry on into the 1980s, substantially raise the projected levels of the Social Security trust funds. Since the amendments were passed, there has been some discussion and several proposals to roll back part of the tax. It is highly likely that additional rollback proposals will be made in the near future. The purpose of this paper is to shed some light on some of the macroeconomic effects of a payroll tax rollback.
Labor Supply, the Payroll Tax, and Internal Rates of Return to Social Security
There is empirical evidence that in the recent past the Old-Age Insurance portion of the Social Security program has acted as a net wage subsidy. In addition, the program had significant intragenerational redistributive effects. Our purpose is to demonstrate how these findings alter conventional views of the labor supply effects of Social Security. Our method is the analysis of a labor supply model that is extended to include empirically significant operational components of the program. We show that the analyses of others are special cases of our more general approach.
Federal Income Taxes, Social Security Taxes, and the U.S. Distribution of Income, 1972
This paper reports on estimates of federal income tax and Social Security tax liabilities of family units in 1972 and summarizes the methods used to make the estimates. Distributions of income both before and after subtracting those liabilities are shown. Several microdata files were combined using both "exact" and "statistical" matching of individual observations in the process of making these estimates.
Self-Employment Income At Low Earnings Levels
Self-Employed Doctors of Medicine Under OASDHI, 1967
Exemption of Clergyman from Social Security Coverage
OASDHI Covered Employment of Foreign Subsidiaries, January-March 1968
Maximum Taxable Earnings Under OASDHI, 1938–69
Household Employment Under OASDHI, 1951–66
Estimating Distributions of Workers and Taxable Wages Under OASDHI
Self-Employed Doctors of Medicine Under OASDHI
OASDHI Covered Employment of Foreign Subsidiaries, January–March 1967
Maximum Taxable Earnings Under OASDHI, 1938–66
Social Security Taxes and Total Payrolls
Employers, Workers, and Earnings Under OASDI
Old-Age, Survivors, and Disability Insurance: Self-Employment Earnings Reported by Farmers, 1955–58
Employers, Workers, and Earnings Under OASDI
Financing Public Welfare Programs
Revision of Public Assistance Tables
Social Security Employment Taxes
Employers, Workers, and Wages, Fourth Quarter 1951
What Contribution Rate for Old-Age and Survivors Insurance?
Employment and Wages Under Old-Age and Survivors Insurance, 1940
Quarterly Employment and Pay Rolls Under Old-Age and Survivors Insurance, 1940
Other
Defined Contribution Pension Participation and Contributions by Earnings Levels Using Administrative Data
This article examines the relationship between earnings levels and participation and contribution rates in defined contribution (DC) retirement plans. Specifically, the article estimates DC plan participation and contribution rates in 2006 both by the worker's current earnings and by the annual average of real earnings over the 10-year period 1997–2006. Using these two different measures of earnings allows us to assess whether employing a longer period of earnings, such as a decade, provides a better representation of pension outcomes than the short-term measure of current earnings.
Value-Added Tax as a Source of Social Security Financing
The data for this study are drawn mainly from the Consumer Expenditure Survey conducted by the Bureau of Labor Statistics during 1972–73. The respondents are divided into five income classes and two age groups. The focus of this analysis is placed on the consumption-type value-added tax.
