In 2000, the ratio of people age 65 or older to people ages 20 to 64 in Ecocountry was 38,4 %. In the year 2060, this ratio is expected to be 56,8 %. Assuming a pay- as-you-go Social Security system, a) What change in the payroll tax rate between 2000 and 2060 would be needed to maintain the 2000

In 2000, the ratio of people age 65 or older to people ages 20 to 64 in Ecocountry was 38,4 %. In the year 2060, this ratio is expected to be 56,8 %. Assuming a pay- as-you-go Social Security system, a) What change in the payroll tax rate between 2000 and 2060 would be needed to maintain the 2000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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In 2000, the ratio of people age 65 or older to people ages 20 to 64 in Ecocountry was 38,4 %. In the
year 2060, this ratio is expected to be 56,8 %. Assuming a pay- as-you-go Social Security system,
a) What change in the payroll tax rate between 2000 and 2060 would be needed to maintain the 2000
ratio of benefits to wages?
b) If the tax rate were kept constant, what would happen to the ratio of benefits to wages?
c) What other policies can be used for Social Security Reform?

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