Sanders, Warren bill would extend Social Security’s solvency, expand benefits
At the 10th Democratic primary debate in 2020’s presidential campaign season, Sen. Elizabeth Warren, D.Mass. and Sen. Bernie Sanders I-Vt. were pictured. They met in Charleston on Feb. 25, 2020.
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Social Security Expansion Act is the name of the proposal. It would increase benefits to current and future beneficiaries by $200 per monthly, or $2,000. Per year. The checks would also be more generous in some other ways.
The plan calls for tax increases on households with high incomes to achieve this goal and increase the program’s solvency.
Sanders and Warren are the co-chairs for Expand Social Security Caucus. They were joined by Democrats, including Senators. Cory Booker from New Jersey, Kirsten Gilibrand of New York and Alex Padilla in California were all joined by Jeff Merkley of Oregon, Jeff Merkleyof Oregon, Jeff Merkleyof Oregon, Chris Van Hollenof Maryland and Sheldon Whitehouseof Rhode Island.
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Employer income exceeding $147,000 will now be subject to payroll taxes in 2022. This bill proposes to lift the cap and apply Social Security’s payroll tax on all income over $250,000.
Social security payroll taxes for employees and employers are 6.2% each. The total 12.4% is deducted from the paychecks.
This bill proposes that the rich pay higher taxes by imposing a 12.4% investment tax and a 12.4% business income tax. It also increases the net investment tax by 12.4%. The levies will be applied to businesses not subject to current payroll taxes.
Sanders stated in prepared remarks at a Thursday Senate hearing that “today, absurdly, and unfairly there is a limit on income subject Social Security taxes.”
According to current terms, an employee earning $147,000 must pay 6.2% of his income for Social Security payroll tax. Sanders explained that workers who earn $1.47million instead of $147,000 will pay only 0.6% for Social Security.
Sanders stated, “That might make sense to someone.” It doesn’t make any sense to me.
The bill would ensure that more than 93% households wouldn’t see their taxes rise under the terms.
It would also extend the program’s solvency beyond 2096.
According to new projections by the Social Security trustees, the combined assets of the program will not be able pay all benefits before 2035. At that point, 80% will be payable.
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