Sanders wants to ‘Scrap the Cap’ on Social Security taxes for high-income...

Sanders wants to ‘Scrap the Cap’ on Social Security taxes for high-income earners

By TMN Interns   
Published
Sen. Bernie Sanders (I-Vt.) introduced a bill on Wednesday that would require high-income earners to pay more money into Social Security. (Bryan Renbaum/TMN/file photo)

By Felecia Pohl

WASHINGTON — Sen. Bernie Sanders said he wants to expand and extend Social Security benefits by raising taxes on people who earn more than $250,000.

“A multibillionaire pays exactly the same amount of money into Social Security as someone who earns $132,900 a year,” Sanders (I-Vt.) said at a news conference Wednesday.

The Social Security Expansion Act, introduced by Sanders on Wednesday, would get rid of the $132,900 Social Security tax cap for those who earn more than $250,000 and would include all earnings such as capital gains and dividends. Consequently, people who earn more than $250,000 a year would pay more into Social Security than those who earn less than that salary. (The $132,900 cap was raised this year from $128,400 in 2018.)

Sanders also said multimillionaires reach their $132,900 cap early into the year and stop paying Social Security payroll taxes at that point, while most other citizens pay the taxes all year.

That includes President Donald Trump, who “claimed that he made 694 million dollars in 2016. If that is accurate, he stopped paying Social Security payroll taxes 40 minutes into January 1 of that year,” Sanders said.

A millionaire stops paying Social Security taxes for the year by Feb. 18, according to the Center for Economic and Policy Research.

Sanders said that Social Security has a $2.9 trillion surplus, and that the money in the trust fund could fully pay out every eligible citizen for the next 15 years. After that, the payout would only be 79 percent of the benefits to eligible citizens. Sanders said the government must do better to extend the life of Social Security.

“We’re going to do that by having the wealthiest people in this country finally start paying their fair share,” he said.

But according to the Committee for a Responsible Federal Budget eliminating the tax cap wouldn’t solve the Social Security problem completely. Right now, Social Security benefits are based on how much a person is taxed, so the more money a person puts in, the more money they’ll receive. Unless that link is broken, people who pay higher taxes would take back the money they put in and the Social Security surplus wouldn’t stay solvent, the nonpartisan nonprofit argues.

Sanders said another benefit of the bill is that it would increase benefits for retirees.

“Twenty percent of senior citizens are trying to survive on an income of less than 13,500 dollars a year,” Sanders said. “A great nation is judged by how it treats the weakest and most vulnerable people amongst us.”

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