Sanders: Strengthen Social Security by taxing large incomes
A forthcoming bill to be proposed by Sen. Bernie Sanders (I-VT), the only Democratic Socialist in the U.S. Senate, would make incomes above $250,000-a-year subject to the payroll tax, a move he says will make the nation’s most beloved social safety net program, Social Security, significantly stronger.
The current payroll tax, which is Social Security’s sole source of funding, only applies to incomes up to $106,800-a-year. Sanders’ bill would not tax incomes between that amount and $250,000-a-year.
“Unfortunately, Republicans in Congress and too many Democrats, have been discussing harmful cuts to Social Security as part of an overall scheme to balance the budget on the backs of the elderly, the sick, the children, and working families,” Sanders wrote in an essay published Thursday. “That is wrong, it is unconscionable, and it must not happen!”
He added that the program, which the Congressional Budget Office says is fiscally sound through 2038, has been dramatically successful in reducing the rates of senior citizens in poverty, but drastic cuts could change that.
“Right now, an American who makes $106,800 a year pays the same amount of money into the Social Security system as a millionaire or a billionaire,” he wrote. “That is because today, all income above $106,800 is exempt from the Social Security payroll tax. As a result, 94% of Americans pay Social Security tax on all of their income, but the wealthiest 6% do not. That is wrong and that has got to change.”
Sanders said his bill would ensure Social Security remains solvent for the next 75 years.
Sanders previously criticized President Barack Obama for his support of a payroll tax holiday, which allows low wage workers to hang onto a additional money from their paychecks, instead of contributing a full 6.2 percent to Social Security as they normally would. The payroll tax requires employers to match their workers’ contributions, but the tax holiday does not apply to them.
Republicans, oddly, have opposed this tax cut, even as it is poised to chop over $100 billion out of U.S. revenues just in the first year. They’ve instead dug in on keeping tax rates at historic lows for the wealthiest Americans, even as President Obama pushes to return them to levels seen during President Bill Clinton’s term amid a much brighter economic outlook.
Republican opposition is likely to be firm against Sanders’ bill, which hasn’t yet been introduced. The Vermont Senator said he plans to file the legislation as soon as the Senate returns to session.
(H/T: The Hill)