Dan Silverman and John Laitner

Dan SilvermanA novel approach to lowering the national debt would encourage older American workers to stay on the job longer by eliminating social security payroll taxes, thus boosting their paychecks by about 10 percent. According to an August 28 report on CBS Detroit, ISR researchers Dan Silverman and John Laitner have found that if workers didn’t have to pay social security taxes from the age of 55 on, they would work 1.5 years longer on average, pay more income taxes, and help reduce the federal deficit. But for Social Security to break even, workers would have to pay about 1 percent higher payroll taxes a year until age 55. “People are living longer, healthier lives, and so far have opted to take most of that extra time as additional retirement rather than work,” Laitner said. “We are proposing a way of responding to this situation through targeted taxrate changes that would reward older workers for staying on the job and also benefit the economy as a whole.” Both researchers are affiliated with the U-M Retirement Research Center.