Raising the Social Security payroll tax cap would strengthen the retirement program while affecting only a small percentage of the wealthiest workers in the United States, according to a new study by the Center for Economic and Policy Research.
The researchers found that legislation proposed by U.S. Sen. Bernie Sanders (I-Vt.) and Rep. Peter DeFazio (D-Ore.) would affect only 1.4 percent of all American workers with earned incomes of more than $250,000 a year.
Currently, only earned income under $110,100 a year is subject to the payroll tax that funds Social Security. There is no tax on income above that cap.
"Today's report makes clear that we do not have to cut Social Security benefits, raise the retirement age, or privatize this life-or-death program that over 55 million Americans rely on. If we simply asked the top 1.4 percent of Americans to pay their fair share into the Social Security Trust Fund, Social Security would be solvent for the next 75 years," Sanders said.
Sanders' bill has 10 co-sponsors, including Senate Majority Leader Harry Reid (D-Nev.). The legislation is patterned after a proposal made by President Barack Obama during his 2008 campaign for the White House. Stephen Goss, the chief actuary of the Social Security Administration, projected in a letter to Sanders that the legislation will ensure that Social Security remains solvent for at least the next 75 years.
Former Sen. Alan Simpson recently referred to seniors worried about cuts to Social Security as "greedy geezers." In fact, the average annual Social Security benefit is $14,000 a year.
Simpson was co-chairman of a White House debt-reduction commission created in 2010. A plan by Simpson and Erskine Bowles that included cuts to Social Security failed to draw the support necessary to send a proposal to Congress for a vote.
"Wall Street Democrats like Erskine Bowles and extreme right wingers like Alan Simpson should stop talking about harmful cuts to Social Security and start asking their billionaire friends to contribute the same percentage of their earned income into Social Security as the middle class," Sanders said.