Here are a few facts we need to start with, according to the Social Security Administration, half of all seniors get half of their income from social security, and for 25% at least 90% of their income is from this source. Also, according to the AARP, in 2021 the Social Security income for the average retired worker will rise monthly from $1,523 in 2020 to $1,543 in 2021 that is $18,516/year, not much above the poverty levels of a family of two, which is at $17,240. Finally, in their annual report, the Social Security Trustees have stated that by 2034, the Social Security Administration reserves will be depleted by 25%.
With this report, there have been renewed calls for cuts, to “Save Social Security.” And sadly, Joe Biden has also been one to push this idea on several occasions. The three different “fixes” are that;
Number 1: We can privatize Social Security and give all the money to Wall Street; what could go wrong there? (cough cough 2008 financial meltdown)
Number 2: We can cut the benefits to our seniors by 24% (similar to the proposed 2011 Grand Bargain), which would then ensure that many will be in poverty, or we can increase the age of receipt to 72+ years old, which means we all have to work later in life. We have the ability to bail out big business, but when it comes to our elderly, suddenly we don’t? There is in fact, a simple fix, and it would only affect the top 4% of earners.
Currently, Social Security is a regressive tax. When you make money, the government takes 6.2% of it and puts that aside for your Social Security, and they also charge a similar 6.2% to your employer, a similar 6.2%. However, this tax is only on the first $142,800 in 2021. Any money over $142,800 is not taxed. This little part of the tax law only benefits the top 4% of Americans. By removing the cap, it is estimated that this change, by itself, would wipe out virtually all (86 percent) of Social Security’s financing gap for the next 75 years, and thus saving our most vulnerable seniors.