In 2014, Social Security payroll taxes totaled $756 billion and accounted for 85% of the program’s total income.
In addition to payroll taxes, the Social Security program receives income from other sources. First, certain Social Security beneficiaries must include a portion of their Social Security benefits in taxable income for the federal income tax, and the Social Security program receives a portion of those taxes. In 2014, revenue from the taxation of benefits totaled $30 billion, accounting for 3% of the program’s total income.
Second, the program receives reimbursements from the general fund of the Treasury for a variety of purposes.General fund reimbursements totaled $0.5 billion, accounting for 0.05% of the program’s total income.
Finally, the Social Security program receives interest income from the Treasury on its investments in special federal government obligations. Interest income totaled $98 billion, accounting for 11% of the program’s total income. Source: Congressional Research Service
Note that while revenue has increased steadily, expenses have increased at a much faster rate. That $98 billion in interest referred to above comes from general government revenue, in effect it is part of the annual deficit and now that interest is the only thing allowing beneficiaries to receive their full earned Social Security benefit.
As you can see below, beginning in 2010 revenues were insufficient to pay benefits and will continue to be. Knowing the trajectory of the trust fund, one has to wonder how any politician can talk about improving benefits before solving the funding problem and recognizing the trillions of dollars in accumulated liabilities. This is not something that will be solved by taxing only the “wealthy.”
Categories: Social Security