Social Security is now and will be extremely important to Americans over the age of 62. It is a major source of income for most older Americans. It is the major source of income for most older Americans. Among elderly Social Security beneficiaries, 50% of married couples and 71% of unmarried persons receive 50% or more of their income from Social Security and among elderly beneficiaries, 23% of married couples and about 43% of unmarried persons rely on Social Security for 90% or more of their income!
Despite the importance of this issue in staving off elderly poverty, the entire fund is expected to run out of money by 2034. This is in 17 years. After that, retirees can generally expect about 77 cents on every dollar of their scheduled benefits.
How I propose to amend Social Security so it will remain solvent for the next 75 years:
In 2018, the maximum amount of earned income (i.e. wages, salaries, tips, and self-employment income) subject to the 6.2% Social Security tax is $128,400. I would remove the cap/limit so that all earned income is subject to the same 6.2% tax. This would mean that every income earner would pay the same percentage of their earnings into Social Security. Why is it fair for the person who makes $25,000/year to pay 6.2% of their wages into Social Security when the person who makes $2,000,000 pays only .39% of theirs? The proportion each person pays should be the same.
In addition, I would also broaden the income subject to Social Security taxation. I would do this by making not only all earned income subject to the Social Security tax but also unearned income. This includes investments such as interest, ordinary dividends and capital gain distributions.
Next, I would exempt the first $30,000 of earned income from the 6.2% Social Security tax (thereby increasing take home pay for people making wages/salaries by $1,860!).
Finally, in addition to removing the cap, I would limit the amount of monthly benefits that single seniors with non-Social Security incomes over $125,000 a year and couples with the same incomes over $250,000 could receive.
I would not support or propose raising the social security retirement age. These measures will ensure solvency for the social security program.