The Sun states that the "primary reason the terms of the 1983 compromise [on Social Security] no longer work is demographic — the population is aging and people are living longer" ("Social Security can be fixed," April 26).
Actually, even way back in 1983, people understood about demographics. The agreement reached then took full account of aging baby boomers. What it did not anticipate is that a higher and higher proportion of national income would flow to the highest income categories. The agreement was crafted so that payroll taxes would cover 90 percent of earned income. Now, however, with income inequality running wild, payroll taxes don't apply to most of the increasingly vast sums pulled in by the highest income brackets.
Consequently, payroll taxes apply to only about 84 percent of earned income. Change the cap on the payroll tax so it covers 90 percent of income again and you will have solved most of the "threat" to the Social Security system. Incidentally, responsible Congressional leaders, including Maryland's own Elijah Cummings and Donna Edwards, proposed that last April, but they have been almost ignored by the mass media and buried by the lobbyists protecting the interests of those who have gained the most from our economic system but don't want to contribute commensurate amounts to maintain it.
Ken Allen, TowsonCopyright © 2014, The Baltimore Sun