Don’t tax or expand Social Security for the rich
Andrew Biggs of The American Enterprise Institute argues Social Security needs targeted reforms, not an across-the-board benefit increase for many retirees who already are doing well, as is being proposed in the House Democrats proposal known as The Social Security 2100 Act. Biggs questions whether Social Security should pay higher benefits to middle class and rich retirees. He notes there is no evidence these retirees aren’t able to maintain their pre-retirement standards of living.
Contributions to 401(k) plans are at record highs, and more retirees are collecting benefits from private retirement plans than at any time in history. Retirement incomes are rising and poverty in retirement is far below poverty rates for working-age households and children. Biggs’s main objection to the Democrat proposal is the tax increase on all workers and employers (from 12.4 to 14.8 percent over time) and a new tax on higher income workers. As he points out (and few may actually know this), the top 1 percent already pay over 1/3 of all income tax received by the federal government. Read his full critique on The Social Security 2100 Act here.
The Association of Mature American Citizens (AMAC) has a different approach, making modest changes in cost of living adjustments and the retirement age, without the need for any tax increases 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 Rep. Larson (D-CT) and merging them with the Association’s own well researched ideas. One of its several components is Social Security PLUS, a new yet voluntary early retirement 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 legislative staffs over the past several years. Read AMAC’s plan here.