Elizabeth Warren Wants To Raise Taxes and Give All the Money to Senior Citizens (opinion)
Social Security doesn’t have enough money to pay everything promised, and Sen. Elizabeth Warren (D–Mass.) has a plan to fix that: Make workers pay more taxes without asking older Americans to give up any benefits.
Warren has been pushing the idea for several months under the guise of defending Social Security against the Trump administration. he claims “it threatens the benefits that millions of Americans have paid for their entire working lives.” In reality, the threat to Social Security is the math of the program itself. Once it reaches bankruptcy in 2032, Social Security trustees project that all benefits will be cut by about 23 percent; If nothing is done, this trend will become reality.
Inside a column published this week New York Times, Warren and Sen. Bernie Moreno (R-Ohio) lists what they want to do: Repeal the cap on the payroll tax. This sounds like a risky idea, but it’s pretty simple. Social Security is funded by a 12.4 percent tax on all earnings up to $184,500. Earnings exceeding the upper limit are not taxed; so a single worker cannot pay more than $22,878 a year into Social Security.
Raising or eliminating the cap, as Warren wants to do, would provide more revenue to redistribute Social Security to retirees. But Warren’s plan has mathematical, political and moral problems.
Let’s take the math first. As the Committee for a Responsible Federal Budget pointingRemoving the payroll tax cap would only extend Social Security’s solvency by 21 years. According to Social Security’s own estimates, eliminating the payroll tax would keep the program afloat. Only out of the red for four years. It does not correct any flaws in Social Security; overly generous benefits This puts the program into bankruptcy in the first place and will accomplish little more than postpone the final reckoning facing Social Security.
In short, it would be a very expensive way to throw the box on the road.
This is where you hit the political problem. As Moreno and Warren to explain in them Times This proposed tax increase would fall squarely on the shoulders of wealthy Americans, the op-ed wrote. They see this as an advantage, not a problem.
It’s certainly no secret that there are Democrats (and now at least one Republican). They want to screw the rich with higher taxes. But let’s take this idea a little further. Let’s say Warren and her friends can pass a bill that eliminates the payroll tax cap. They now have huge new tax revenue, all from the wealthiest Americans. Mission accomplished, right?
So what’s the best way to spend this money? Warren’s plan to achieve all In the form of Social Security benefits for retirees.
That means all other Democratic spending priorities would achieve nothing from one of the largest tax increases in American history. There’s nothing for health programs, nothing for schools, nothing for welfare. Senior citizens get everything. Is this really a proposal Democrats would support?
This leads directly to the moral problem. inside Times“Instead of cutting benefits to retirees who rely on Social Security, we need to take bipartisan action to preserve those benefits, reward work, and restore equity,” Moreno and Warren write.
But what’s fair about a proposal that says Social Security beneficiaries shouldn’t have to use social security? any Benefit cuts? some households Earn more than $5,000 per month Social Security benefits and Older Americans are the wealthiest group of people in the country.
If Moreno and Warren believe that wealthier Americans should bear the burden of fixing Social Security, they should seek to cut Social Security benefits, either through testing or by restructuring how benefits are structured. For example, in 2022 the Congressional Budget Office calculated He said Social Security’s insolvency could be fixed by giving all seniors a fixed monthly payment equal to 150 percent of the federal poverty line (about $1,700 a month). This would certainly be better than asking workers to pick up the entire bill.
What’s really exciting is that Moreno and Warren have the audacity to describe their proposal as being about “fairness.” In fact, they prioritize the economic well-being of older Americans above all other political constituencies in the country. While they refuse to ask retirees to be part of the solution, they want higher taxes on workers and want all that new tax revenue to flow solely to senior citizens.
This isn’t good policy, it doesn’t seem like smart policy, and it’s certainly not fair to everyone who has to foot the bill.
Post Elizabeth Warren Wants to Raise Taxes and Give All the Money to Seniors appeared for the first time reason.com.
