Ann - See Diamond and Orszag, Saving Social Security which recommends this. One caveat though. SS does not currently have a deficit. The deficit (when outlays exceed payroll taxes) is projected to occur in 2017. So raising the cap above $87,000 would, at this point in time, simply add to the trust fund. The problem with adding to the trust fund is that the fund is both a form of "saving" and a "debt" of the Treasury to the SSA -- both an asset and a liability of the federal government. The rich are already balking at repaying the debt, or indeed the interest on the debt which will need to be tapped in 2017. I can't see them being any happier about paying instead through payroll taxes. Though in principle this would make sense for a number of reasons Diamond and Orszag discuss. For discussion of the politics of the trust fund, see my book, The Raw Deal. Ellen Frank
-----Original Message----- From: PEN-L list on behalf of Ann Davis Sent: Sun 11/21/2004 3:41 PM To: [EMAIL PROTECTED] Cc: Subject: [PEN-L] Social Security research on effect of the income ceiling Can you recommend research on the effect of raising the Social Security income ceiling, and/or increasing the progressivity of the tax rate on the so-called crisis? That is, with a higher income limit, and steeper tax rate schedule, how much of the Social Security "deficit" could be eliminated? References welcome. Thanks, Ann
