The effects of collecting income taxes on Social Security benefits

• 成果类型: Article
• 署名作者: Jones, John Bailey; Li, Yue
• 署名单位: Federal Reserve System - USA; Federal Reserve Bank - Richmond; State University of New York (SUNY) System; University at Albany, SUNY
• 刊物名称: JOURNAL OF PUBLIC ECONOMICS
• ISSN/ISSBN: 0047-2727
• DOI: 10.1016/j.jpubeco.2018.01.004
• 发表日期: 2018
• 页码: 128-145
• 关键词: Social Security; labor supply; taxation

摘要

Since 1983, Social Security benefits have been subject to income taxation, a provision that can significantly increase the marginal income tax rate for older individuals. To assess the impact of this tax, we construct and calibrate a detailed life-cycle model of labor supply, saving, and Social Security claiming. We find that in a long run stationary environment, replacing the taxation of Social Security benefits with a revenue-equivalent change in the payroll tax would increase labor supply, consumption, and welfare. From an ex-ante perspective an equally desirable reform would be to make the portion of benefits subject to income taxes completely independent of other income.