Fixing Social Security, to make is sustainable, should involve cross generational changes (meaning the full burden does not fall solely on younger working Americans) and we should seek to raise the contribution for employers as in general they have abandoned support for retirees.
After that is accomplished, then let’s talk about the cost and method of improvements we want to pay for.
When we proceed, two considerations should be kept in mind.
- Don’t turn the program into a general fund welfare plan
- Decide on a reasonable income replacement target. That means what percentage of a workers last years earnings should be replaced by Social Security?
From the Motley Fool
Unpopular opinion alert: The rich are already paying their fair share Although this may sound like a perfectly logical solution, I’m going to offer up and defend a highly unpopular opinion — namely, that the rich are already paying their fair share into Social Security.
While I don’t deny that the percentage of earned income “escaping” the payroll tax has increased in recent decades, there are two factors that should make lawmakers hesitant to approach fixing Social Security as a “tax-the-rich” strategy. To begin with, there’s a reason the payroll tax cap exists in the first place; it isn’t just plucked out of the air by the Social Security Administration each year.
Rather, the maximum taxable earnings cap exists because there’s also a cap on the amount retired workers can be paid each month at full retirement age ($2,861 in 2019). This means that it doesn’t matter whether you earned an average of $150,000 a year throughout your life or $10 million a year, the most you could be paid by Social Security in 2019 at full retirement age is $2,861 per month.
The payroll tax cap exists because a maximum retired worker benefit amount also exists. The second factor to consider is that what workers put into the program isn’t necessarily what they get out of the program — and I’ll lean on an analysis from Urban Institute to prove it.