Sen. Elizabeth Warren, D-Mass., and Sen. Bernie Sanders, I-Vt., on the tenth Democratic major debate of the 2020 presidential marketing campaign season in Charleston, South Carolina, on Feb. 25, 2020.
Jim Watson | AFP | Getty Pictures
Sens. Bernie Sanders, I-Vt., and Elizabeth Warren, D-Mass., launched a brand new invoice on Thursday that goals to increase Social Safety’s solvency for 75 years by elevating taxes on the rich, whereas in some methods making advantages extra beneficiant.
The proposal, referred to as the Social Safety Enlargement Act, would broaden advantages for present and new beneficiaries by $200 monthly, or $2,400 per 12 months, and would make the month-to-month checks extra beneficiant in different methods.
To try this, and enhance this system’s solvency on the identical time, the plan additionally requires elevating taxes on high-earning households.
Sanders and Warren, who’re co-chairs of the Develop Social Safety Caucus, have been joined by Democrats together with Sens. Cory Booker of New Jersey, Kirsten Gillibrand of New York, Jeff Merkley of Oregon, Alex Padilla of California, Chris Van Hollen of Maryland and Sheldon Whitehouse of Rhode Island, together with Rep. Peter DeFazio, a Democrat representing Oregon.
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In 2022, payroll taxes are utilized to earnings as much as $147,000. The invoice requires lifting that cap and making use of the Social Safety payroll tax to all earnings of greater than $250,000.
Social Safety payroll taxes are utilized at a fee of 6.2% for each the employer and worker, for a complete of 12.4%, which is deducted from pay checks.
The invoice requires having the rich pay extra via a 12.4% tax on funding and enterprise earnings, rising the web funding earnings tax by 12.4% and in addition making use of the levies to sure companies that aren’t presently topic to payroll taxes.
“As we speak, absurdly and unfairly, there’s a cap on earnings topic to Social Safety taxes,” Sanders mentioned in ready remarks throughout a Thursday Senate listening to.
Beneath at present’s phrases, a employee incomes $147,000 pays 6.2% of their earnings to Social Safety payroll taxes. But when as a substitute they earn $1.47 million, they pay simply 0.6% of their earnings to Social Safety, Sanders mentioned.
“Which will make sense to any individual,” Sanders mentioned. “It does not make sense to me.”
Beneath the phrases of the invoice, greater than 93% of households wouldn’t see their taxes go up.
On the identical time, it could lengthen this system’s solvency previous 2096.
New projections from the Social Safety trustees present this system’s mixed funds will solely be capable of pay full advantages till 2035, at which level 80% of advantages can be payable.
Elevating taxes on the rich with the intention to shore up this system is well-liked amongst voters, in line with a survey released this week by the College of Maryland’s Program for Public Consultation.
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