哈维罗森财政学（第八版）英文课件.ppt

CHAPTER 11 SOCIAL SECURITY Why Have Social Security? Consumption Smoothing and the Annuity Market How Social Security works Annuity Consumption smoothing Adverse Selection and the Annuity Market Asymmetric information Adverse selection Other Justifications Lack of foresight and paternalism Moral hazard Economize on decision-making and administrative costs Income Redistribution Improve the Economic Status of the Aged Fully Funded Plan Pay As You Go (or Unfunded) System Today’s Partially Funded System Explicit Transfers Benefits for dependents and survivors (1939) Supplemental Security Income Benefits How to calculate benefits AIME (Average Indexed Monthly Earnings) – average monthly earnings in 35 highest paid years Wages indexed for inflation Ceiling on AIME – up to tax ceiling Benefit Structure If AIME $656 ? PIA = .90*AIME If $656 AIME $3955 ? PIA = .90*$656 + .32*(AIME - $656) If AIME $3955 ? PIA = .90*$656 + .32*($3955-$656) + .15*(AIME - $3955) Adjustments Annual inflation adjustment Age at which benefit is drawn Normal retirement age Early retirement – benefit reduced 5/9th of one percent a month for first 36 months preceding normal retirement age Late retirement – benefit increased 15/24th of one percent a month Adjustments Family Status +50% for spouse or dependent child If covered worker dies spouse receives 100% of worker’s benefit or spouse’s benefit Divorced spouse married at least 10 years gets spouse benefit if not remarried while covered worker alive Earnings test and taxing benefits Benefits reduced $1 for every $2 earned above $12,480 Individuals losing benefits may have later benefits increased Up to 85% of benefits taxed for recipients with income above a base amount ($25,000 for single and $32,000 for married taxpayers.) Financing FICA (Federal Insurance Contribution Act) 2006 Social Security Tax rates Employee 6.2% (OASI - 5.6%, DI - .6%) of first $94,200 of earnings on both employee and employer Self-