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| Congressman Larson |
John Larson, the Chairman of the House Social Security Subcommittee, and Democratic Senators Blumenthal and Van Hollen have introduced the Social Security 2100 Act which would increase Social Security benefits and reduce taxes paid on Social Security benefits. The bill would also increase the FICA tax in two ways. Income over $400,000 would be covered by the FICA tax and the FICA rate itself would climb by 0.1% a year between 2020 and 2043. The bill has 200 cosponsors in the House of Representatives, all Democrats.
The Office of Chief Actuary at Social Security has now scored the Social Security 2100 Act. It would leave the Social Security trust funds in balance for the next 75 years at least.
There is little hope that such a bill would pass with Republicans in control of the Senate. However, Democrats running for Congress and the White House in 2020 may choose to run on this bill and then try to pass it in 2021.
Such a deal for younger workers, more taxes. Does it included changes to early retirement age and Medicare eligibility too?
ReplyDeleteThe donut-hole approach to FICA taxes is a way of saying, "let the poor and the rich pay, but give the middle class out of it." If we are going to impose FICA above the current limits, then apply FICA to everyone on all earnings subject to FICA. And then watch the stream of people looking to take earnings as dividends instead of earnings. The high income earners will evade the tax burden through legal loopholes put in place by their friends in Congress.
ReplyDeleteIf only there had been some kind of mathematical way to determine that a large cohort of the population was going to age out at the same time and hit the system for benefits. A logical course of action to increase the taxes on that cohort while they were working would have helped to lower a shortfall in the system.
ReplyDeleteI guess they didn't have an abacus.