Taxing high earners to help fund Social Security gains bipartisan attention
With Social Security due to reach a funding shortfall in six years, more lawmakers are opening up to the idea of taxing high earners to help fund the program.
TL;DR
- Social Security faces a funding shortfall and may be unable to pay full benefits by late 2032.
- Some lawmakers, including Republicans, are now supporting the idea of raising taxes on high earners to fund the program.
- Lifting or modifying the payroll tax cap is a primary proposal, which currently applies to earnings up to $184,500.
- Completely eliminating the cap could cover a significant portion of the program's $30 trillion, 75-year shortfall.
- Opponents warn of potential negative economic impacts, such as reduced work hours and GDP, and argue it's a large tax increase on a small group.
- Other proposed solutions include raising the payroll tax rate or a combination of tax increases and benefit cuts.