View Research by Author - Frank Sammartino

Citation URL: http://www.urban.org/FrankSammartino

This study uses a dynamic microsimulation model, DYNASIM3, to compare how proposed reforms to the Social Security system might affect American women's economic well-being. Although Social Security is vitally important for women, many older women live in poverty. In addition, there is concern that the program provides smaller benefits to some women who contributed to the system than to others who never worked or worked little. We examine eight reform proposals that would increase Social Security benefits and three packages of reforms that combine benefit increases for some women with reductions for others. The proposals' distributional implications differ significantly.

The federal income tax system has been used in a number of ways to promote favored forms of consumption and investment and to help selected groups of taxpayers. Since the mid-1980s, Congress has increasingly used the federal tax code to support social programs. This trend is likely to continue. We document provisions of the tax code that are aimed at low-income families including their history and recent changes. We also provide a review of literature surrounding the effect of these provisions. Finally, we discuss important differences in spending and tax programs. Understanding tax programs targeted toward low-income families is particularly important at a time when spending programs are being scaled back.

As the baby boom generation gets closer to retirement, the debate over Social Security reform becomes more urgent. Unfortunately, policymakers remain fixated on individual accounts and other ways for the system to accumulate more savings. This narrow focus ignores an equally important, if not more important, challenge--how to address the needs of those who have been left out as demographics and work habits have changed the structure of the American family. In this book, budget experts and social scientists examine the history of family benefits in Social Security and show how changes in the retired population have affected the nature of these benefits and their ability to serve the elderly. They examine the current structure of spousal and survivors benefits and evaluate a variety of reform proposals--including individual accounts--that could improve the living standards of the neediest Social Security beneficiaries. It is essential analysis for anyone concerned about the future of America's most successful social program.

To sort out the pros and cons of using the tax system to enact social policy goals, in particular to help low-income families, the Urban Institute convened a tax policy forum in Washington, D.C., on June 21, 2001. The discussion revealed that using the tax system as a social policy tool is a much more complex and subtle undertaking than would appear to be the case from many popular announcements. This publication draws on the forum discussion to present an overview of the issues involved in using the tax system to promote social goals.

With support from the Bush administration, the Federal Reserve Board Chairman, and Congress, a major cut in the federal income tax is almost certain. The question now is what type of cut it should be. Proponents often speak as though all tax cuts would benefit all groups. Not all income tax cuts are alike, however. Many popular options in fact provide no benefit to low-income families.

President George W. Bush, as part of his tax reform package, proposed to double the child credit from $500 to $1,000 and create a new ten percent tax bracket. Together, these provisions would reduce the marginal tax rates paid by low-income families. This paper examines the President's proposal and other proposals circulating in Congress in early May 2001. Five types of analyses are provided: the extent to which benefits for raising children vary at different income levels, the marginal tax rates implicit in various proposals, the effect of the proposals on marriage penalties, their distributional effects, and, finally, the associated revenue cost.

Recent large federal budget surpluses have spurred debate on how best to use the money. Some see surpluses as an opportunity to pay down the federal debt, to expand programs to meet such social needs as health care and education, or to secure the future of Social Security. Others propose returning some of the money to taxpayers by cutting federal income taxes, an option championed by President Bush that has widespread support in Congress.

Policymakers need to understand how Social Security reforms affect income distribution. Existing models range from simple representations of career earnings of typical workers to complex general equilibrium models. Population micro-simulation models, which project the earnings, wealth, and demographic histories of a representative sample of families, are useful for simulating many reform proposals. This report evaluates one such model - the projected cohorts model - and then discusses in detail three important issues in model development: 1) representing saving behavior, 2) capturing macro-economic effects, and 3) accounting for risk and uncertainty.

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