If we’re serious

About Social Security

There is a meme circulating on FB that purports to show the ridiculous level of income that Elon Musk takes each year in comparison to the amount he contributes to the Social Security system. Leaving Musk out of the conversation (a consummation devoutly to be wished), there is also a lot of discussion about the ‘crisis’ in Social Security and Medicare, usually with an eye toward cutting benefits because the alternative, which is raising taxes, is politically unsavory.

Among the arguments made is that raising tax revenue by eliminating the income cap on Social Security taxation without commensurately increasing the benefit level would be unfair to those with higher income and would make Social Security into “just another welfare program” and thereby render it unacceptable. The reality, like it or not, is that other forms of self-preparation for retirement having been eliminated or rendered useless for most people by changes in the income tax structure over the years, Social Security is essential if millions of people aren’t to be destitute in their senior years. In 2022, which is the latest base year for most government statistics, 70.6 million Americans received Social Security benefits and 5.6 million were added to the rolls of recipients.

If the income of the 804,830 Americans who reported AGI over $1 million in 2022 was taxed at the Social Security rate of 6.2% on the entire amount instead of being capped at $147,000 as it was, that would generate $26.7B in extra revenue for the system at a minimum because many of the 804 thousand had income well in excess of $1M. While this wouldn’t solve the problem completely, it would be a major step in the right direction and would make changes in eligibility requirements more palatable even though still painful.

This country has a long sad history of favoring the wealthy (especially the white, male wealthy) over everyone else but expanding the social safety net that was set up during the FDR administrations would again, as it did then, bring the country together and provide an economic boost as the 20% of Americans who benefit from an intact Social Security system have the money to spend on necessities with the confidence that it won’t run out or be subject to the fund-raising priorities of politicians. For those who will argue that increasing taxes without increasing benefits to match, anyone whose income is at that level should have enough to put some by and not require further support from what is intended to be an economic floor that people won’t be let fall through rather than a lifestyle maintenance program. If they are unable to do so, I suggest that they get out and meet some people in the other 99% of the population who don’t have a choice and learn how they do it.