Social Security Benefits

When it comes to Social Security, those who need the benefits are not receiving them, while those who do not need them, have an abundance of benefits. Under the current Social Security plan, benefits are estimated to end by the year 2040 unless America changes the way we approach said benefits. Also, young workers will end up receiving less money in benefits than they pay in taxes right now under the current plan.
Right now, citizens are taxed according to what they make, but only up to $70,000, which means the higher and lower classes are not being taxed proportionally. We argue that we should tax a percentage of the total income rather than income up to $70,000.
We have also decided to use annual evaluations to see what level of benefits

each applicant needs. That way, we will not be distributing benefits unnecessarily. This includes physical evaluations at free medical clinics in case the applicant cannot afford medical care, but will also be open to the public to use for a fee. We also plan to offer financial and career consultants which are open to applicants as well as the public.

I. INTRODUCTION
1.

Background
On October 29, 1929, the stock market crashed, spiraling America into The Great Depression. The unemployment rate rose from 5% to about 25% leaving millions of Americans without any source of income. In addition to the crash of the stock market, a drought overtook the country, preventing the growth of crops. Without agriculture, many families were thrust into starvation. This devastated the economy, leaving American families desperate for some type of economic reform.
Huey Long, a senator in the 1930s, created the “Share the Wealth” program, which redistributed wealth among the lower classes, in an effort to stabilize the American economy. This program was one of the earliest developments of our current Social Security system. The “Share the Wealth” program built the foundation for Franklin D. Roosevelt’s eventual solution to the Great Depression.
2. Restatement of the Problem
In the analysis, we were requested to find a viable solution to the current problems with the Social Security system. Under the current system, young workers are taxed more than they will actually receive in benefits, causing the system to gradually deteriorate by the year 2040. Some recipients receive unnecessary benefits, while others who greatly need benefits are not receiving the appropriate amount. Reevaluations do not take place, meaning that some benefits are continuously distributed, even after they should have “expired”. Contrarily, others may qualify for more extensive benefits,

but are not able to receive them.
Under the current Social Security system, young workers are being taxed more than they receive in benefits, meaning that benefits will end by the year 2040

As shown in the graph, the number of people receiving benefits is higher than the number of people actually paying taxes. This results in a greater tax rate, as well as a decrease in benefits for the individuals that are working.

The graph above shows that the projected number of people receiving Social Security benefits is expected to increase greatly due to the large number of baby boomers reaching retirement age, compared to the much smaller number of workers paying into Social Security.
3. Social Security Assumptions
Throughout our analysis, we will make the following assumptions:
1. The jobs of government officials will be properly executed.
2. Evaluations and medical examinations will be thorough.
3. Medical history will be reviewed.
4. Drug tests will be a part of the medical examinations.
5. Evaluations and files will be submitted on time each year, and will contain accurate information.
II. METHODS FOR IMPROVEMENT
1. The current tax bracket will still be in use, but income after $70,000 will also be included in this bracket.
a. This will increase revenue for Social Security benefits because significantly higher income households will be taxed according to the entirety of their annual income.
b. Residents will be taxed fairly and proportionally.
2. Qualifications for Social Security Applicants
a. Analysis of the applicant’s employment history for the past five years will take place.
i. If applicant has been fired from a job in the past five years, it cannot be for a criminal charge more serious than a Class C Misdemeanor.
ii. If an appeal has been granted or if the charge was rightfully expunged from records, a thorough investigation will take place and the termination of the job may be overlooked.
b. Applicant must not have been convicted of a crime more serious than a Class C Misdemeanor.
i. If the charge was rightfully expunged from records, a thorough investigation will take place and the crime may be overlooked, depending on the investigation’s results.
3. Annual reevaluations for applicants.
a. This will ensure that participants are receiving a fair amount of money, which will vary according to possible health treatments, number of dependents, changes in income/loss of income, and extenuating circumstances.
i. Evaluations will include physical evaluations, disclosure of medical health history, and regular drug testing.
b. Unemployed applicants are given an initial minimum of two years to find employment.
i. Extensions may be granted for extenuating circumstances during the annual reevaluations.
4. Construct a chain of federal hospitals owned by Social Security.
a. These hospitals will not be limited to beneficiaries of Social Security, but will be open to the public.
i. Will be operated comparable to any other public hospital.
b. All profit generated by the hospital will fund Social Security benefits.
c. Medical care is free to Social Security applicants that are unable to afford regular health care.
5. Tax on residents, rather than just citizens.
a. This will ensure equal payment by residents of the U.S, greatly increasing the money we will have to fund Social Security benefits.
b.

Attempt to match the Canadian residency tax.
i. Residents include: anyone that owns a home in the U.S., has a spouse or long-term partner in the U.S., dependents in the country, owns personal property, social ties, religious organizations, owns a U.S., credit card or bank account, driver’s license, passport, or health insurance.
ii. Anyone living in the U.S. for more than 183 days is considered a “resident”.
iii. Tax also depends on the resident’s situation (income, dependents, etc.)
iv. Larger number of people will be taxed, which would allow the current tax rates to lower, similar to Canada’s tax system, which is shown in the graph below.

6. Financial consultants and career consultants available to applicants.
a. If an applicant is in the process of reapplying for Social Security benefits, but has been unable to find a job and are able to work, career consultants are available to assist them in the finding of a job.
b. If an applicant is in the process of reapplying for Social Security benefits, has a job, but is still experiencing financial issues, they have the opportunity to speak with a financial consultants that will teach them budgeting, so they will receive only the bare minimum and eventually be able to thrive without Social Security

benefits.

III. CONCLUSION
Throughout this analysis of the current Social Security system, our group found many holes in the plan already set forth. For instance, the government only taxes up to the first $70,000, as opposed to a flat percentage of income. Also, Social Security applicants are not susceptible to annual evaluations which ensure that the government only grants the bare minimum amount for benefits. With the problem of illegal immigration, many people who live in the United States are not citizens, so they aren’t taxed.
We propose that we enact a residency fee, which would ensure that as many people as possible are paying into the Social Security system, which would allow us to decrease the tax rate, but still make a massive profit. With this profit, we would be able to establish a system that allows people to receive the correct amount of benefits, instead of unevenly distributing to those that do not meet qualifications. Going hand in hand with this proposal, we would begin annual reevaluations for people that receive Social Security benefits to ensure that no one is receiving unnecessary benefits.
Although some minor problems may occur, our modification to the Social Security system is the most logical approach. This system will be able to last at least 75 years, due to the massive intake of money and the fair distribution of benefits.