Does taxing the rich more to save Social Security make sense?

Sean Williams presents a solid reason for and a solid reason against raising the tax cap on Social Security wages to fix the program’s long-term financial woes.  Currently workers pay 12.4% in payroll taxes (split evenly between employee and employer) on the first $132,900 in wages.  Nine in ten workers currently pay tax on all their wages, meaning they are under the cap.  Thus, the idea to increase the cap is popular in that it will affect relatively few taxpayers.  Williams notes Democrats favor raising the cap, and revenue would be generated immediately under any plan.  Republicans have favored raising the retirement age, an approach that makes sense to many due to increasing longevity, but one that would take more time for savings to be realized.  However, Williams also noted that the rich do pay their fair share in the sense that rich people’s benefits are also capped.  One who has earned millions his whole life will still get no more than the current monthly maximum of $2,861/mo in benefits.  Read the full piece here.

The Association of Mature American Citizens (AMAC) believes Social Security must be preserved and modernized.  This can be achieved by making modest changes in cost of living adjustments and the retirement age, with no additional taxes on workers.  AMAC advocates for a bipartisan compromise, “The Social Security Guarantee Act,” taking selected portions of bills introduced by former Rep. Johnson (R-TX) and current Rep. Larson (D-CT) and merging them with the Association’s own well researched ideas.  One component is Social Security PLUS, a new, voluntary plan that would allow all earners to have more income available at retirement.  This component is intended to appeal especially to younger workers.  AMAC is resolute in its mission that Social Security be preserved and modernized and has gotten the attention of lawmakers in DC, meeting with a great many congressional offices and their staffs over the past several years.  Read AMAC’s plan here.



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