TheDC Analysis: AARP, Dems undermine younger workers’ retirement

“If you decided you wanted to go to a system of individual savings accounts where people under a certain age can put their money into private accounts, that wouldn’t relieve you of the need to take care of current beneficiaries,” Certner said.  “You simply would be paying taxes for Social Security benefits twice  ̶  once for yourself and once for current beneficiaries.”

Heritage Foundation Social Security analyst David C. John believes it is hard to tell whether Bush’s plan could have staved off the inevitable due to its preliminary status at the time it was shelved. But, he said, payroll tax hikes could be down the road because Congress likely will be backed against the wall in an effort to plug the Social Security budget gap.

AARP advocates doing just that by raising the maximum amount of earnings subject to the FICA tax above the current $107,000 cap, which would result in 90 percent of all wages in the economy supporting Social Security.

“The wage growth has been a lot more on the high end than on the low end, so there are a lot of wages that just aren’t taxed,” Certner said.

But Tanner warns doing so would harm economic growth and give the U.S. a higher marginal tax rate than Sweden.