Wednesday, August 25

The gap

Economics prof Mark Perry, drawing from the 2001 Gokhal and Kotlikoff report, asks, "Is war between generations inevitable? What about a war between the sexes?" I'd like to see updated information. Is this still true?
A male reaching 65 years of age today can expect to receive $71,000 more in government transfer benefits (of all kinds at both the federal and state levels, but mainly from Social Security and Medicare) than he will pay in taxes (of all kinds at both the federal and state levels) before he dies.

2. A 65-year-old female can expect a net gain of more than twice that amount; she can expect $163,000 more in benefits than she will pay in taxes.

A far different picture confronts people entering the labor market today. In general, they will pay far more in taxes than they will receive from transfer programs, and any expansion of elderly entitlements will make things worse. For example:

3. A 20-year-old female can expect to pay $92,000 more in taxes than she will receive in transfer benefits over her lifetime.

4. The future looks more than three times as bleak for her male cohort, who can expect to pay $312,000 more in taxes than he will ever receive in benefits...
 ~ Dr Mark Perry
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