“Taxing the rich” is no Panacea for Social Security’s Financial Issues - Motley Fool
The cornerstone of President Biden’s proposed solution to Social Security’s financial problems is to raise the payroll tax by applying it to those whose annual earnings exceed $400,000 – effectively “taxing the rich” more than those who earn under than the normal annual payroll tax cap ($160,200 for 2023). That effectively creates a taxation “donut hole” where only those whose earnings exceed $400,000, and those who earn $160,000 or less would pay into Social Security. Politically expedient, for sure, and it would add additional revenue to help Social Security financially, but it doesn’t actually solve the program’s problems, especially since accompanying “perks” in the President’s proposal would somewhat offset the additional revenue received by additional taxes. All of this is succinctly articulated in this Motley Fool article by Sean Williams.
Fact is, what’s needed is reform which addresses the actual reason that Social Security is financially stressed in the first place – declining ratio of contributors to recipients and the steadily increasing life-expectancy of beneficiaries (most now collect benefits for decades).
AMAC has been at the forefront trying to strengthen Social Security by developing and proposing its Social Security Guarantee, which restores the program to solvency without raising payroll taxes. AMAC has been discussing and continues to discuss this common-sense solution with Congressional Representatives in its efforts to protect America’s senior citizens who rely on Social Security. To review AMAC’s Social Security Guarantee, click here.