Raising the income cap on Social Security taxes would extend the life of full benefits for 61 years, Sen. Bernie Sanders said Thursday.
The Social Security trust fund is projected to run out of money and lead to payment cuts of 25 percent in 2034. A raised cap could extend its solvency until 2105.
Sanders’ proposal would require earners to pay Social Security tax on the first $127,000 of income and anything above $250,000.
His plan pointed to white papers on Social Security by two liberal advocacy groups. Anybody who makes $1 million annually has by this time of the year already reached his or her $127,000 threshold.
“If Donald Trump made as much money as his campaign says he did, he would have stopped paying Social Security taxes 40 minutes into the year,” contended Ben Olinsky, vice president of policy and strategy for the Center for American Progress.
A new report by the center claimed the rise in income inequality has damaged the trust fund.
“Due to runaway incomes at the top, the share of total earnings subject to the payroll tax has sunk from 90 percent in 1983, when Social Security underwent its last major reform, to about 83 percent today,” the report said.
An accompanying study by the Center for Economic and Policy Research said Sanders’ proposal would take additional money from only 1.6 percent of workers.