The Treasury Department released the sixth in its series of issue briefs on Social Security reform, with this final brief focusing on work incentives presented by the Social Security program. It's a fairly long piece that explores the issue in detail and is worth checking out. Here are some of the basics: The Treasury brief then goes on to discuss potential reforms to improve incentives to work and delay retirement.
Monday, January 12, 2009
Treasury releases Social Security issue brief on work incentives
However, Social Security also imposes a marginal tax on additional work. This "substitution effect" will discourage people from working, particularly under certain circumstances that are specific to the Social Security benefit formula. For instance,
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