Читать книгу Northern Light: Lessons for America from Canada's Fiscal Fix - Robert P. Murphy - Страница 19

Absent major demographic changes, there is no way to continue with present tax and benefit schedules earmarked for these dedicated programs. Although the entitlement situation in the United States presents unique difficulties, the Canadian approach to social insurance at the federal level provides some instructive lessons.

First and most obvious, the Canadians significantly increased the tax rate on earnings earmarked for the Canadian Pension Plan. In addition to the tax-rate increase, changes to benefit schedules were also introduced, including reduced eligibility for disability benefits, a cap on death benefits, and a change in the formula for individual benefit payments.

Yet there are other lessons to be drawn from Canada’s approach to entitlements. Despite the tax-rate increase, the CPP tax is much less onerous than the Social Security tax on US workers and employers, in terms of both percentage and the amount of income taxable.

In Canada, the federal pension plan does not assume nearly the same role in retirement planning as Social Security has come to mean in the United States. For starters, the benefit can only be one-quarter of pensionable earnings. To handle cases of seniors deemed to have an inadequate income, there is a dedicated, means-tested program, namely the Guaranteed Income Supplement (GIS) program, financed out of general tax revenues. Finally, Canada has a federal Old Age Security (OAS) program, which is also paid out of general revenues and is not tied to a recipient’s work history.

The interesting feature of the Canadian approach is that it breaks up the functions handled in the United States by Social Security (and to some extent, Medicare and Medicaid) into separate programs. US policymakers should consider something similar as part of longer-term reform.