Please ensure Javascript is enabled for purposes of website accessibility

Liberals would raise Social Security tax for rich

WASHINGTON — Nervous that Social Security seems under siege from all sides, congressional liberals on Wednesday proposed raising the payroll tax that funds the program, but only for people earning more than $250,000 a year.

The legislation is designed to keep the pension program solvent for the next 75 years, which is the standard used by government actuaries, by putting an additional $6.5 trillion into the Social Security trust fund over that period. The plan also is intended to head off other efforts to overhaul the program or trim benefits, or to use its funds to help pay for debt reduction.

“No more discussion about raising the retirement age, no more discussion about cutting benefits, no more discussion about privatization,” said Rep. Peter DeFazio, D-Ore., one of the sponsors.

With Republicans making opposition to tax increases their mantra, the measure seems to have little chance of enactment.

Nonetheless, it gives liberals a chance to underscore their support for the widely popular program at a time when President Barack Obama has proposed cutting the payroll tax to help create jobs and GOP presidential contender Rick Perry, the Texas governor, has called its finances a “Ponzi scheme.”

Currently, workers and their employers each owe a payroll tax of 6.2 percent of a worker’s wages up to $106,800 a year. That tax would also be imposed on wages above $250,000 under the liberals’ plan. Other sponsors include Sens. Bernard Sanders, I-Vt., Barbara Boxer, D-Calif., and Sheldon Whitehouse, D-R.I.

In an effort to boost consumer spending and create jobs, Obama has proposed paring the 6.2 percent payroll tax on employees to 3.1 percent next year and cutting the payroll tax for employers as well. He would replace the revenue Social Security would lose with money from the government’s overall budget.

Obama’s plan has split liberals. Sanders said he opposes it because it would make Social Security more vulnerable to budget cuts. Boxer said she favors it because it would create jobs while protecting Social Security.

In debt reduction talks between Obama and House Speaker John Boehner, R-Ohio, this summer, they discussed a plan to slow the growth of Social Security benefits that they never embraced. In 2005, President George W. Bush proposed letting recipients turn part of their Social Security nest egg into stock market investments. The idea went nowhere.

2 comments

  1. How can he lower the rate and take from government budget when the government has no spare money. Sounds like double speak to me.

  2. Heck of a deal, raise the Social Security tax on the rich and we are home free. First it will end up being a corporate tax and corporate does not pay taxes, they will raise their prices, only they will be able to buy the product. Hell of a deal, government employees will be exempt, this is why all the backers(mostly democrats) are backing it. Do you think for a minute this going to effect the Clintons? Or Bushes, or Obama. Hell no. Or any of the governmental employees. This will come down on us once more. These people want the public to bail them out and they can go on their merry way. Watch their trickery, we all ready fell for on measures 66 & 67, notice the prices at our stores.