Currently, only earned income under $110,100 a year is subject
to the payroll tax that funds Social Security. There is no tax on
income above that cap.
Raising the Social Security payroll tax cap would strengthen the
retirement program while affecting only a small percentage of the
wealthiest workers in the United States, according to a new study
by the Center for Economic and Policy Research.
The researchers found that legislation proposed by U.S. Sen. Bernie
Sanders (I-Vt.) and U.S. Rep. Peter DeFazio (D-Ore.) would affect
only 1.4 percent of all American workers with earned incomes of
more than $250,000 a year.
Currently, only earned income under $110,100 a year is subject to
the payroll tax that funds Social Security. There is no tax on
income above that cap.
"Today's report makes clear that we do not have to cut Social
Security benefits, raise the retirement age, or privatize this
life-or-death program that over 55 million Americans rely on.
If we simply asked the top 1.4 percent of Americans to pay their
fair share into the Social Security Trust Fund, Social Security
would be solvent for the next 75 years," Sanders said.
Sanders' bill has 10 co-sponsors, including Senate Majority Leader
Harry Reid (D-Nev.). The legislation is patterned after a proposal
made by President Barack Obama during his 2008 campaign for the
White House. Stephen Goss, the chief actuary of the Social
Security Administration, projected in a letter to Sanders that the
legislation will ensure that Social Security remains solvent for at
least the next 75 years.
Former Sen. Alan Simpson recently referred to seniors worried about
cuts to Social
Security as "greedy geezers." In fact, the average annual Social
Security benefit is $14,000 a year.
Simpson was co-chairman of a White House debt-reduction commission
created in 2010. A plan by Simpson and Erskine Bowles that included
cuts to Social Security failed to draw the support necessary to
send a proposal to Congress for a vote.
"Wall Street Democrats like Erskine Bowles and extreme right
wingers like Alan Simpson should stop talking about harmful cuts to
Social Security and start asking their billionaire friends to
contribute the same percentage of their earned income into Social
Security as the middle class," Sanders said.