Table 8--(Continued)
The 1.8 Percent Solution: Pay-As-You-Go Payroll Tax vs. Market-Based Payroll Deduction
Pay-As-You-Go 12.4% Payroll Tax
Market-Based 12.4% Payroll Deduction
(Present Law + 1.8%)
Column
1
2
3
4
5
6
7
8
9
10
Cash Flow
Projected
OASI
Cash Flow
9.6%
Cash Flow
Cash Flow Difference as
Year
GDP
12.4% Tax
Benefit
Cash Flow
as % GDP
Payroll Tax OASI Benefit Cash Flow
as % GDP
Difference
% GDP
2040
58,770
2,863
3,618
(755)
-1.28%
2,217
3,370
(1,153)
-1.96%
(396)
-0.67%
2041
61,621
2,996
3,778
(782)
-1.27%
2,319
3,391
(1,072)
-1.74%
(287)
-0.47%
2042
64,586
3,133
3,945
(812)
-1.26%
2,426
3,346
(921)
-1.43%
(106)
-0.16%
2043
67,682
3,277
4,121
(845)
-1.25%
2,537
3,298
(761)
-1.12%
86
0.13%
2044
70,918
3,427
4,307
(880)
-1.24%
2,653
3,231
(578)
-0.81%
305
0.43%
2045
74,312
3,583
4,502
(919)
-1.24%
2,774
3,147
(374)
-0.50%
549
0.74%
2046
77,841
3,745
4,708
(962)
-1.24%
2,900
3,056
(156)
-0.20%
809
1.04%
2047
81,532
3,915
4,926
(1,010)
-.124%
3,031
2,947
84
0.10%
1,097
1.35%
2048
85,397
4,093
5,157
(1,064)
-1.25%
3,169
2,822
346
0.41%
1,413
1.65%
2049
89,444
4,278
5,400
(1,122)
-1.25%
3,312
2,693
619
0.69%
1,745
1.95%
2050
93,668
4,471
5,658
(1,187)
-1.27%
3,461
2,555
906
0.97%
2,097
2.24%
2051
98,077
4,672
5,932
(1,260)
-1.28%
3,617
2,399
1,218
1.24%
2,482
2.53%
2052
102,685
4,882
6,224
(1,341)
-1.31%
3,780
2,245
1,535
1.49%
2,880
2.80%
2053
107,516
5,103
6,533
(1,430)
-1.33%
3,950
2,101
1,850
1.72%
3,284
3.05%
2054
112,582
5,332
6,859
(1,527)
-1.36%
4,128
1,941
2,187
1.94%
3,718
3.30%
2055
117,873
5,571
7,203
(1,632)
-1.38%
4,313
1,782
2,531
2.15%
4,167
3.54%
2056
123,399
5,821
7,566
(1,744)
-1.41%
4,507
1,622
2,885
2.34%
4,634
3.76%
2057
129,182
6,083
7,948
(1,865)
-1.44%
4,709
1,457
3,252
2.52%
5,122
3.96%
2058
135,240
6,357
8,350
(1,993)
-1.47%
4,922
1,290
3,632
2.69%
5,630
4.16%
2059
141,614
6,644
8,771
(2,127)
-1.50%
5,144
1,128
4,015
2.84%
6,148
4.34%
2060
148,290
6,944
9,210
(2,266)
-1.53%
5,376
979
4,397
2.96%
6,668
4.50%
2061
155,283
7,258
9,667
(2,409)
-1.55%
5,619
841
4,778
3.08%
7,192
4.63%
2062
162,610
7,585
10,142
(2,557)
-1.57%
5,873
712
5,161
3.17%
7,723
4.75%
2063
170,283
7,928
10,637
(2,709)
-1.59%
6,138
592
5,546
3.26%
8,261
4.85%
2064
178,283
8,287
11,154
(2,867)
-1.61%
6,416
480
5,936
3.33%
8,809
4.94%
2065
186,755
8,662
11,693
(3,031)
-1.62%
6,706
380
6,326
3.39%
9,364
5.01%
2066
195,573
9,054
12,255
(3,201)
-1.64%
7,009
296
6,713
3.43%
9,922
5.07%
2067
204,814
9,464
12,842
(3,378)
-1.65%
7,327
253
7,074
3.45%
10,460
5.11%
2068
214,496
9,891
13,456
(3,545)
-1.66%
7,657
206
7,451
3.47%
11,024
5.14%
2069
224,609
10,337
14,097
(3,761)
-1.67%
8,003
156
7,846
3.49%
11,615
5.17%
2070
235,188
10,802
14,768
(3,966)
-1.69%
8,363
104
8,259
3.51%
12,234
5.20%
2071
246,246
11,288
15,472
(4,183)
-1.70%
8,739
49
8,691
3.53%
12,883
5.23%
2072
257,829
11,795
16,208
(4,413)
-1.71%
9,132
35
9,097
3.53%
13,519
5.24%
* All amounts in billions of nominal dollars.
(Based on information from 1998 Trustees Report, intermediate assumptions)
4Ibid.,
9Ibid.,
p. 9.
p. 108. By 2013 benefits will exceed revenue if the
Disability Insurance (DI) portion of OASDI is included.
5Ibid.,
Table II.B1., pp. 3334.
10For
a thorough discussion see http://www.ssa.gov/
6Ibid.,
Table II.E2., pp. 6566. The contribution bases by
history/reports/gspan4.html, chapters 1 and 2.
Alternative I, II, and III in 2007 are $95,400, $96,000, and
11
$103,800, respectively.
For a comprehensive treatment of the legislation, see
John A. Svahn and Mary Ross, "Social Security Amend-
7
Ibid., Table I.C1., p. 6.
ments of 1983: Legislative History and Summary of
Provisions," Social Security Bulletin 46, no. 7 (July 1983).
8
Ibid., Table I.C1., p. 6.
13