Context
Marc Goldwein suggested a new Social Security scenario during the latest CRFB meeting. It is essentially the opposite of the Roth-style swap for Social Security, while leaving the Medicare portion of the reform alone.
New proposal to model
For Social Security:
- Immediately tax 100% of Social Security benefits.
- Make the employee 6.2% Social Security payroll tax deductible from income tax.
- Leave the Medicare portion of the existing reform unchanged.
Marc described this as a traditional retirement-account structure for Social Security: contributions are deductible and benefits are taxable. It should be a large near-term revenue raiser because current retirees would be taxed at 100% even though they never received the payroll tax deduction.
Related policy scenarios from Marc
- Model a $700 nonrefundable credit with the same phase-out as the senior deduction.
- Keep two Roth-style runs, including the Extended Roth-Style Swap with contribution taxes phasing in immediately and benefit taxation phasing out between 2029 and 2062, with Social Security first and then Medicare.
- Run the Extended Roth-Style Swap directly against the Balanced Fix Baseline, where trust fund gaps are closed through payroll tax increases and benefit cuts.
Dashboard and presentation follow-ups
- Default the 75-year view to percent of payroll.
- Default the 10-year view to dollars.
- For percent-of-payroll results, break out OASI and HI because they use different taxable payroll denominators.
- For most reform options, allocate revenue to maintain current projected trust fund shares rather than current-law allocation rules.
Acceptance criteria
- Add a clearly named reform scenario for the reverse-Roth Social Security proposal.
- Save full reform H5 artifacts for every modeled cell, not just aggregate CSV rows.
- Aggregate downstream from the saved H5s using PolicyEngine/MicroSeries operations only.
- Add dashboard results and methodology notes that distinguish this proposal from the Roth-style swaps.
- Preserve the existing Balanced Fix comparison path for the Extended Roth-Style Swap.
Context
Marc Goldwein suggested a new Social Security scenario during the latest CRFB meeting. It is essentially the opposite of the Roth-style swap for Social Security, while leaving the Medicare portion of the reform alone.
New proposal to model
For Social Security:
Marc described this as a traditional retirement-account structure for Social Security: contributions are deductible and benefits are taxable. It should be a large near-term revenue raiser because current retirees would be taxed at 100% even though they never received the payroll tax deduction.
Related policy scenarios from Marc
Dashboard and presentation follow-ups
Acceptance criteria