Bernie Sanders Proposes Ending Social Security Tax Cap
Senator Bernie Sanders proposed eliminating the taxable maximum cap on earnings to prevent Social Security insolvency and increase annual benefits.
U.S. Senator Bernie Sanders proposed eliminating the taxable maximum cap on earnings to increase revenue for Social Security and extend the program's solvency. Sanders, who is expected to chair the Senate Finance Subcommittee on Social Security, Pensions and Family Policy, intends to use the additional funds to increase benefits by at least $2,400 annually. The proposal addresses a projected insolvency by 2032 that would otherwise trigger a 22% cut in benefits.
Outgoing Senator Bill Cassidy rejected the plan, arguing that the tax would unfairly impact middle-class workers. As an alternative, Cassidy proposed the creation of a $1.5 trillion investment fund over five years. This fund would be held in escrow for 70 years and is designed to cover up to 75% of the projected trust fund shortfall, relying on an estimated average growth rate of 8.5%.
