Without the earnings test, low-wage earners would work 50 percent more, and middle earners 18 percent more, according to a 2000 study by Leora Friedberg, an economist at the University of Virginia. A 2008 study by Steven J. Haider, at Michigan State University, and David S. Loughran, at the RAND Corporation, found that the earnings test significantly reduced the labor supply of early retirees.

Now, here’s the really odd part. The earnings penalty is actually a sheep in wolf’s clothing. Under an arcane provision known as the adjustment of the reduction factor — ARF, for short — if you earn too much between 62 and 66, the loss of benefits will be made up to you, at 66, in the form of a permanent benefit increase.

Come again? You get taxed and then you get untaxed?

Precisely.

Consequently, millions of older Americans believe they face a huge tax on working, which, if they understood the ARF, they’d ignore.

The best birthday gift we can bestow to Social Security is simply to eliminate the “now I tax you, now I don’t” combination of the earnings test and the ARF.

This would significantly improve work incentives for early Social Security beneficiaries. And here’s the best part: It shouldn’t cost Uncle Sam a dime. A tax that’s fully handed back, after all, doesn’t produce any net revenue.

So much for helping young retirees stay active. What about even older folks — for example, those 70 or older? Fewer than 12 percent of them are still on the job.

Giving them a lower tax rate might turn this statistic around. You don’t need to be a rabid supply-sider (we certainly aren’t) to recognize that lowering payroll taxes on Americans over 70 could induce at least some additional work force participation (and perhaps even pay for itself, through higher income tax revenue).