The 1997 tax act's pro-savings agenda gave us expanded IRAs, estate tax relief, and capital gains cuts. A view that the U.S. savings rate is too low extends to proposals to reform Social Security.
Payroll taxes account for more than one-third of federal receipts.
Proponents of privatization argue that so large a sum should not be invested in government IOUs with only a modest return. They suggest a range of solutions, including an individual option to elect out of the system, a mandatory savings program for all workers, or an additional payroll tax that could be invested by the wage earner instead of being turned over to the government. Opponents of privatization emphasize the safety-net nature of the program and worry that the poor cannot afford the risks inherent in a private system. Individuals and businesses must decide whether privatization makes sense, given the graying of America. Copyrights and legal disclaimers.