It took France 141 years to double the share of its over-60 population, from 9% in 1835 to 18% in 1976: China was expected to do it in 32 years; Singapore in 21 years.
The report said that if the demographic shift went unchecked it could overwhelm national economies and social programs. Countries would at the very least have to raise taxes and reduce social security benefits.
To help avert the crisis the Bank said governments should encourage private savings to finance retirement and hand over public pension funds to private-sector management to avoid corruption or mismanagement.
It also suggested cutting payroll taxes and retirement benefits to the rich and middle class, and redesigning government pension plans to provide only a minimum income for the old, especially the poor. In countries where pension plans were going bust, the report suggested raising tine retirement age eliminating rewards for early retirement, and reducing benefit levels.
Boom, Bust, & Echo adds that countries with aging populations also have to consider higher taxes on interest, dividends, capital gains, and corporate profits and wealth. "There is plenty of room for reform without imposing any undue hardship on the wealthiest Canadians."
The book cites a study by American economist Edward Wolff in 1995 which found that "personal wealth is taxed at a much lower rate in Canada than in such staunchly capitalist societies as Switzerland and the U.S. Among 22 countries, Canada ranked 21st in percentage of tax revenues derived from wealth taxes."
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|Title Annotation:||countries might be overwhelmed by large, aging population|
|Publication:||Canada and the World Backgrounder|
|Article Type:||Brief Article|
|Date:||May 1, 1998|
|Previous Article:||The upside of growing old.|
|Next Article:||Stressing the system.|
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