Sen. Elizabeth Warren (D–Mass.) has a plan to "save" Social Security from upcoming benefit cuts—and all it will require is sacrificing a huge chunk of the economy via the biggest tax hike in over 40 years.
Is that worth it? Americans ought to be skeptical.
Warren's plan calls for eliminating the cap on the payroll tax as a way to generate more revenue for Social Security. Right now, Social Security is funded with a 12.4 percent tax on all earnings up to $184,500. Earnings that exceed the cap are not taxed—so, a single worker cannot pay more than $22,878 into Social Security annually.
Warren and her allies—now including some Republicans, like Sen. Bernie Moreno (R–Ohio), who has endorsed the idea—have dressed up this proposal as a way to tax the rich, because it would only affect earnings that exceed the annual cap.
But that's only half the story.
Is that worth it? Americans ought to be skeptical.
Warren's plan calls for eliminating the cap on the payroll tax as a way to generate more revenue for Social Security. Right now, Social Security is funded with a 12.4 percent tax on all earnings up to $184,500. Earnings that exceed the cap are not taxed—so, a single worker cannot pay more than $22,878 into Social Security annually.
Warren and her allies—now including some Republicans, like Sen. Bernie Moreno (R–Ohio), who has endorsed the idea—have dressed up this proposal as a way to tax the rich, because it would only affect earnings that exceed the annual cap.
But that's only half the story.
3 months ago
