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,What change in the payroll tax rate between 2000 and 2060 would be needed to maintain the 2000 ratio of benefits to wages?If the tax rate were kept constant, what would happen to the ratio of benefits to wages?What other policies can be used for Social Security Reform?

Pay-As-You-Go is referred to as a pension plan for retirement in which the beneficiaries have the…

Answered: In 2000, the ratio of people age 65 or…

Economics: Private and Public Choice (MindTap Course List)

16th Edition

ISBN:9781305506725

Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Chapter28: Income Inequality And Poverty

Section: Chapter Questions

Problem 6CQ

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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,

What change in the payroll tax rate between 2000 and 2060 would be needed to maintain the 2000 ratio of benefits to wages?
If the tax rate were kept constant, what would happen to the ratio of benefits to wages?
What other policies can be used for Social Security Reform?

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