Author: Publisher: ISBN: Category : Federal government Languages : en Pages : 16
Book Description
Saving is the portion of national output that is not consumed and represents resources that can be used to increase, replace, or improve the nation's capital stock. The U.S. net national saving rate reached a post-war peak of 12.4% in 1965 and has then trended downward since to a low of 0.8% in 2005. Many analysts claim that saving is too low. Among the Organization for Economic Cooperation and Development (OECD) countries, the United States has the third lowest saving rate. Survey evidence suggests that people know why they should save, but many don't save, especially lower-income individuals and families. Several reasons have been offered to explain the declining personal saving rate and the relatively high proportion of individuals and families do not always make optimal decisions regarding consumption and saving. The government offers tax incentives to individuals and families to save. The empirical evidence on the relationship of tax incentives to the saving rate mostly comes from examinations of traditional individual retirement accounts (IRAs) and 401(k) plans. The reported results are mixed, but generally indicate small effects. Be that as it may, the tax incentives tend to benefit higher-income individuals and families. The primary reasons are (1) higher-income individuals are much more likely to save, and (2) higher-income individuals face higher marginal tax rates and benefit more from sheltering income from taxation. Furthermore, the tax revenue loss for these incentives lower public saving by reducing the budget surplus or increasing the budget deficit. For FY2006, these tax incentives are estimated to cost the U.S. Treasury $125.6 billion in forgone tax revenues -- almost 40% of the estimated FY2006 budget deficit. The Bush Administration and the President's Advisory Panel on Federal Tax Reform have advocated expanding tax incentives as the primary policy to encourage personal saving. Research has shown that personal saving has been fairly unresponsive to tax incentives, however, and such incentives may substantially decrease public saving (that is, increase the budget deficit). The long-term net effect on national saving and economic growth is likely negative.
Author: William G. Gale Publisher: ISBN: Category : Languages : en Pages : 96
Book Description
American Saving Rates have recently fallen to their lowest levels since 1950. After averaging roughly 8 percent in the 1950s, 1960s, and 1970s, the net national saving rate fell to about 4.5 percent in the 1980s and has fallen below 2 percent since 1990. The personal saving rate has also declined, from an average of 7 percent between 1950 and 1980 to an average of 4.6 percent since 1990. These declines have raised concerns that the economy may be unable to finance investment and sustain growth over the long run and that a significant fraction of the baby-boom generation may not be saving adequately for retirement.
Author: R. Glenn Hubbard Publisher: A E I Press ISBN: Category : Business & Economics Languages : en Pages : 56
Book Description
In this paper, we argue that there is more to be learned from recent research on the effectiveness of targeted saving incentives than is suggested by the wide variation in empirical estimates. First, we conclude that characterizations of saving appear to stimulate moderate amounts of new saving. Second, we suggest a cost-benefit approach to ask: What is the incremental gain in capital accumulation per dollar of foregone revenue? We find that for quite conservative measures of the saving impacts of IRAs or 401(k)s, the incremental gains in capital accumulation per dollar of lost revenue are large.
Author: Publisher: ISBN: Category : Languages : en Pages : 0
Book Description
Saving is the portion of national output that is not consumed and represents resources that can be used to increase, replace, or improve the nation's capital stock. The U.S. net national saving rate reached a post-war peak of 12.4% in 1965 and has then trended downward since to a low of 0.8% in 2005. Many analysts claim that saving is too low. Among the Organization for Economic Cooperation and Development (OECD) countries, the United States has the third lowest saving rate. Survey evidence suggests that people know why they should save, but many don't save, especially lower-income individuals and families. Several reasons have been offered to explain the declining personal saving rate and the relatively high proportion of individuals and families that do not save. Economic reasons start from the premise that individuals and families are rational and make optimal decisions about consumption and saving throughout the life course. Low saving rates are then explained by economic disincentives induced by government policy or by life cycle changes in the propensity to save. Behavioral reasons start from the premise that individuals and families do not always make optimal decisions regarding consumption and saving. The government offers tax incentives to individuals and families to save. The empirical evidence on the relationship of tax incentives to the saving rate mostly comes from examinations of traditional individual retirement accounts (IRAs) and 401(k) plans. The reported results are mixed, but generally indicate small effects. Be that as it may, the tax incentives tend to benefit higher-income individuals and families to a much greater extent than lower-income individuals and families. The primary reasons are (1) higher-income individuals are much more likely to save, and (2) higher-income individuals face higher marginal tax rates and benefit more from sheltering income from taxation. Furthermore, the tax revenue loss for these incentives lower public saving by reducing the budget surplus or increasing the budget deficit. For FY2006, these tax incentives are estimated to cost the U.S. Treasury $125.6 billion in forgone tax revenues -- almost 40% of the estimated FY2006 budget deficit. The Bush Administration and the President's Advisory Panel on Federal Tax Reform have advocated expanding tax incentives as the primary policy to encourage personal saving. Research has shown that personal saving has been fairly unresponsive to tax incentives, however, and such incentives may substantially decrease public saving (that is, increase the budget deficit). The long-term net effect on national saving and economic growth is likely negative. This report contains historical data and will not be updated.
Author: Thomas L. Hungerford Publisher: ISBN: Category : Languages : en Pages :
Book Description
This report examines why individuals and households save or don’t save, and the effectiveness of the various incentives and inducements in increasing personal and national saving.
Author: Barry Leonard Publisher: DIANE Publishing ISBN: 9781422319024 Category : Business & Economics Languages : en Pages : 32
Book Description
Many people mistakenly believe that Social Security (SS) will pay for all or most of their retire. needs, but the fact is, since its inception, SS has provided little protection. A comfortable retire. usually requires SS, pensions, personal savings & invest. The key tool for making a secure retire. a reality is financial planning. It will help clarify your retire. goals as well as other financial goals you want to ¿buy¿ along the way. It will show you how to manage your money so you can afford today¿s needs yet still fund tomorrow¿s. You¿ll learn how to save your money to make it work for you & how to protect it so it will be there when you need it. Explains how you can take the best advantage of retire. plans at work, & what to do if you¿re on your own. Illustrations.
Author: Eric M. Engen Publisher: ISBN: Category : Saving and investment Languages : en Pages : 76
Book Description
This paper evaluates research examining the effects of tax-based saving incentives on private and national saving. Several" factors make this an unusually difficult problem. First, households that participate in, or are eligible for, saving incentive plans have systematically stronger tastes for saving than other households. Second, the data indicate that households with saving incentives have taken on more debt than other households. Third, significant changes in the 1980s in financial markets, pensions, social security, and nonfinancial assets interacted with the expansion of saving incentives. Fourth, saving incentive accounts represent pre-tax balances, whereas conventional taxable accounts represent post-tax balances. Fifth, the fact that employer contributions to saving incentive plans are a part of total employee compensation is typically ignored. A major theme of this paper is that analyses that ignore these issues overstate the impact of saving incentives on saving. We show that accounting for these factors largely or completely eliminates the estimated positive impact of saving incentives on saving found in the literature. Thus, we conclude that little if any of the overall contributions to existing saving incentives have raised private or national saving. Portions of this article were published in the JEP, 1996, under title of "The Illusory Effects of Saving Incentives on Saving."
Author: Matthew S. Rutledge Publisher: ISBN: Category : Languages : en Pages : 37
Book Description
The U.S. government subsidizes retirement saving through 401(k) plans with $61.4 billion in tax expenditures annually, but the question of whether these tax incentives are effective in increasing saving remains unanswered. Using longitudinal U.S. Social Security Administration data on tax-deferred earnings linked to the Survey of Income and Program Participation, the project examines whether the “catch-up provision,” which was enacted in 2001 and allows workers over age 50 to contribute more to their 401(k) plans, has been effective in increasing earnings deferrals. Compared with similar workers under age 50, the study finds that contributions increased by $540 more among age-50-plus individuals who had approached the 401(k) tax-deferral limits prior to turning 50, suggesting that the older individuals respond to the expanded tax incentives. For this group, the elasticity of retirement savings to the tax incentive is quite high: a one-dollar increase in the tax-deferred limit leads to an immediate 49-cent increase in 401(k) contributions.
Author: Publisher: DIANE Publishing ISBN: 078814555X Category : Social security Languages : en Pages : 65
Book Description
This publication informs advocates & others in interested agencies & organizations about supplemental security income (SSI) eligibility requirements & processes. It will assist you in helping people apply for, establish eligibility for, & continue to receive SSI benefits for as long as they remain eligible. This publication can also be used as a training manual & as a reference tool. Discusses those who are blind or disabled, living arrangements, overpayments, the appeals process, application process, eligibility requirements, SSI resources, documents you will need when you apply, work incentives, & much more.
Author: 
Author: William G. Gale
Author: R. Glenn Hubbard
Author: 
Author: Thomas L. Hungerford
Author: Barry Leonard
Author: Eric M. Engen
Author: Matthew S. Rutledge
Author: United States. Congress. Senate. Committee on Finance
Author: