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22 Cards in this Set

  • Front
  • Back
payment to which eligible citizens have a right by law
government program funded by earmarked payroll taxes of employers, employees, or both. Its purpose is the pooling of risk of losses
social insurance
program provided by for-profit insurance companies and funded by premiums. its purpose is the pooling of risk losses.
private insurance
any governmetn program that is targeted to aid low-income people
social (public) assistance
taxes based on earnings from work, usually deducted directly from the paycheck
payroll taxes
having sufficient reserves to pay all expected liabilities; legal requirement of private insurance
fully funded
program in which current taxes pay current benefits
pay-as-you-go program
right specified by law
statutory right
right specified in contract between parties
contractual right
principle that benefits received are proportional to amounts paid in
individual equity
principle that benefits are sufficient to provide a minimum level of economic security to the population as a whole
social adequacy
maximum amount of earnigns subject to payroll taxes
tax base
percent of taxable earnings that will be collected as tax for payroll taxes
tax rate
tax that takes a larger percentage of lower incomes than of higher incomes
regressive tax
tax taht takes a larger percentage of higher incomes than of lower incomes
progressive tax
tax that takes the same percentage of income from people at all income levels
proportional tax
percentage of worker's last working year's earnings that is replaced by Social Security retirement benefits
replacement rate
minimum age at which workers can retire with full Social Security benefits
normal retirement age
taxes invested to pay future Social Security benefits
trust fund
process by which insured people's choices lead to higher-than-average loss levels
adverse selection
tendency of theh population to substitute Social Security for private saving, thus decreasing private saving
Social Security wealth effect
Social Security's effect of increasing private savings by encouraging earlier retirements
early retirement effect