Can the Wealthy Save Social Security?

Money Explainers

Explore the debate around taxing higher incomes to save Social Security. Discover a proposed solution to Social Security's financial challenges. What are the options on the table to secure your retirement benefits? #SocialSecurityFunding. #TaxTheRich. #RetirementSolutions.

Transcript

00:00As Social Security faces a projected depletion of its trust funds by 2034, the debate over

00:06how to ensure its long-term solvency intensifies.

00:10One significant proposal gaining traction involves taxing higher-income earners, and

00:16even their investment income, to bolster the program's revenue.

00:20Currently, top earners in the U.S. do not pay Social Security taxes on any income above

00:26$176,100 per year.

00:31This means that income earned beyond this threshold is not subject to the payroll tax that funds

00:36Social Security.

00:38Nancy Altman, president of the advocacy group Social Security Works, argues that assessing

00:44Social Security taxes on higher income, including investment income, could generate enough revenue

00:50to keep paying full Social Security benefits through the end of the century?

00:55Her perspective is clear, America is the wealthiest country in the history of the world, at the

01:00wealthiest moment in our history.

01:03That money can remain concentrated in the hands of billionaires, or it can go towards Social

01:08Security, enriching all of our lives.

01:12This proposal directly challenges the current structure of Social Security taxation and offers

01:17a potential pathway to avoid benefit cuts.

01:21However, it's not the only approach being considered.

01:25Congressional Republicans have, in the past, proposed alternative fixes.

01:30These include raising the retirement age for younger workers, which would delay when individuals

01:36become eligible for benefits, and reducing the benefits formula, which would lower the amount

01:41beneficiaries receive.

01:43These different approaches highlight the political complexities involved in finding a solution

01:48that garners bipartisan support.

01:51The backdrop to this debate is also concerning.

01:54The Social Security Administration itself has been experiencing significant challenges,

02:00including cutting thousands of employees approximately 12% of its workforce.

02:05This reduction in staff has led to longer telephone wait times and fewer in-person appointments

02:10for beneficiaries seeking assistance.

02:13Altman contends that these staff cuts, often justified in the name of government efficiency,

02:20do little to address Social Security's fundamental long-term financial issues.

02:25She argues, Today's report is a reminder that even as cuts to the Social Security Administration

02:32can Social Security's customer service.

02:35They are doing nothing to improve its solvency.

02:38The discussion around Social Security's funding is a critical one, impacting millions of current

02:43and future beneficiaries.

02:45Whether through increased taxation on higher incomes, adjustments to retirement age and

02:51benefits, or a combination of strategies, the need for Congressional action is undeniable

02:57to secure the future of this essential program.

03:00The path to solvency remains a contentious, but vital conversation for the nation.

03:06Many Explainers

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