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senate Bill S. 731

Extending and Expanding Social Security by Raising Taxes

Argument in favor

Extending Social Security’s solvency by increasing taxes on the wealthy is the fairest way to ensure that our country’s seniors can continue to rely on this program well into the future.

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01/28/2016
"Social Security is the most successful government program in our nation’s history. Before it was signed into law, nearly half of senior citizens lived in poverty. Today, the elderly poverty rate is 10 percent. Although still much too high, that’s a dramatic improvement." [berniesanders.com]
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01/28/2016
"We cannot ask seniors with modest savings to live on even less. Instead, we should expand Social Security so they can retire with the dignity they have earned over the course of their working lives." [martinomalley.com]
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Leo's Opinion
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01/17/2016
Taking the income cap off social security taxes is long overdue.
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Argument opposed

There are better ways to reform Social Security to keep it solvent that don’t raise taxes, while also taking into account increased life expectancies.

William's Opinion
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08/10/2015
Social Security is a pyramid scheme. It will never be solvent. It's time to phase it out and let individuals be responsible for their own retirement.
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BTSundra's Opinion
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01/16/2016
The last thing we need is more taxes, and we don't need larger social programs. We should get rid of Social Security altogether and let people care for themselves. The government can't be trusted with our money, especially the money of elderly people in need.
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SherryTX's Opinion
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01/17/2016
Not no, but NO NO NO!!! The ACA took $800 million from Medicare and they have lowered reimbursements to the point that doctors are no longer accepting Medicare. Plus all the managed care Medicare plans are taking away from Medicare. Repeal ACA and put that money back where it belongs.... In the "lock box" that our elected officials said they would never touch. Medicare should be eliminated. We should not be paying into a program that the govt has proven time and again that they can't be trusted to run.
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What is Senate Bill S. 731?

This bill would amend title II of the Social Security Act -- which covers Old Age, Survivors and Disability Insurance -- in order to extend the life of the program by raising payroll taxes.


The primary insurance amount would be increased for all eligible beneficiaries beginning in 2021, and the formula used to compute cost-of-living adjustments would be revised in order to use the Consumer Price Index for Elderly Consumers.


There would also be an increase in the special minimum primary insurance amount by basing it on years in the workforce, in order to assist those who earned a low income throughout their lifetime.


Changes to the Internal Revenue Code would:

  • Apply employment and self-employment taxes to income up to the contribution and benefit base, and to income in excess of $250,000 .

  • Increase the tax on investment gain from 3.8 percent to 10 percent of the lesser of net investment income for a taxable year, or the excess (if any) of the modified adjusted gross income for a taxable year over the threshold amount.

  • Of this tax revenue, 62 percent would be allocated to the Federal Old-Age and Survivors Insurance Trust Fund (OASI), while 9 percent would go towards the Federal Disability Insurance Trust Fund (DI).

Impact

Taxpayers and senior citizens, the Social Security Administration.

Cost of Senate Bill S. 731

A CBO cost estimate is unavailable.

More Information

In-Depth: Under current law, the maximum amount of annual income that can be subjected to the payroll tax that helps fund Social Security is $118,500 -- meaning that all income above that threshold is exempt from those taxes.


This bill’s sponsor, Sen. Bernie Sanders (I-VT), called his proposal “the most effective way to strengthen Social Security for the future.” He also expects that if enacted it would boost monthly Social Security benefits by about $65 for most recipients.


Given current projections, the Social Security trust funds would not be able to meet all of their obligations in 2033 -- when obligations would exceed incoming tax revenue -- and it would only be able to pay out about three-quarters of scheduled benefits. In an analysis of this legislation, the actuaries for the Social Security trust funds estimated that this proposal would allow the provision of full Social Security benefits through 2060.


There have been several other proposals that address Social Security’s future insolvency without raising taxes. Some of which would raise the retirement age, while others would suspend ‘overlapping benefits’ that allow people collecting disability payments and unemployment benefits.


The retirement age is already being gradually raised from 65 to 67 years old for full Social Security benefits, but 70 is the age often being used in proposals as raising the retirement age to 70 could save nearly $35 billion. Given that life expectancy for those who reach age 65 has grown from 77.2 years in 1930 to 84.1 years in 2010 while the retirement age remained essentially constant, that may be a realistic option.


Of Note: The main threat to Social Security’s long-term survival comes from the shrinking ratio of workers to beneficiaries -- as the number of people in the workforce paying taxes to fund the program has declined relative to the number of people receiving benefits. In 1960, there were 5.1 workers for every Social Security beneficiary, by 2009 that number had dropped to 3 workers, and it is expected to fall to 2.2 workers in 2030.


Media:

Summary by Eric Revell
(Photo Credit: Flickr user frankieleon)

AKA

Social Security Expansion Act

Official Title

A bill to enhance Social Security benefits and ensure the long-term solvency of the Social Security program.

bill Progress


  • Not enacted
    The President has not signed this bill
  • The house has not voted
  • The senate has not voted
      senate Committees
      Committee on Finance
    IntroducedMarch 12th, 2015
    "Social Security is the most successful government program in our nation’s history. Before it was signed into law, nearly half of senior citizens lived in poverty. Today, the elderly poverty rate is 10 percent. Although still much too high, that’s a dramatic improvement." [berniesanders.com]
    Like (164)
    Follow
    Share
    Social Security is a pyramid scheme. It will never be solvent. It's time to phase it out and let individuals be responsible for their own retirement.
    Like (19)
    Follow
    Share
    "We cannot ask seniors with modest savings to live on even less. Instead, we should expand Social Security so they can retire with the dignity they have earned over the course of their working lives." [martinomalley.com]
    Like (27)
    Follow
    Share
    Taking the income cap off social security taxes is long overdue.
    Like (14)
    Follow
    Share
    The last thing we need is more taxes, and we don't need larger social programs. We should get rid of Social Security altogether and let people care for themselves. The government can't be trusted with our money, especially the money of elderly people in need.
    Like (11)
    Follow
    Share
    I'm for increasing taxes for social security because I would rather pay a little extra in taxes rather than seeing Republicans cut essential programs in order to cover the costs of social security.
    Like (9)
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    Taxes are the price we pay for civilization.
    Like (8)
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    Social Security is a successful program funded by the people. We pay into this our entire working lives. Social Security should be EXPANDED.
    Like (6)
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    Since it was the USGov who borrowed OUR Social Security money- our savings, for our future, should it then be the USGov to pick up the difference?
    Like (6)
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    I've lived in Paris, Denmark, and Iceland. They all have slightly higher taxes in order to offer a better quality of life to all their citizens. America needs to stop passing laws that favor the rich and instead pass laws that favor the masses.
    Like (6)
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    Not no, but NO NO NO!!! The ACA took $800 million from Medicare and they have lowered reimbursements to the point that doctors are no longer accepting Medicare. Plus all the managed care Medicare plans are taking away from Medicare. Repeal ACA and put that money back where it belongs.... In the "lock box" that our elected officials said they would never touch. Medicare should be eliminated. We should not be paying into a program that the govt has proven time and again that they can't be trusted to run.
    Like (6)
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    Share
    The income-cap on social security is absurd and unfair. Social Security isn't sustainable only because those who hold the largely-vast majority of wealth in this country pay just as much as someone who makes $250,000/yr (which is still a pretty sack of take-home change)
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    First off keep the big spenders in Washington out of it to fund their pet projects and replace the money they have borrowed ( i.e.) stole out of it then figure out how to repair it so it works
    Like (4)
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    Medicare is one of the best operated system in all of the USA! Please e firefight to keep it!!!.
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    Don't raise taxes. Remove the income cap. Income is taxable for middle class and removing the cap will insure solvency.
    Like (4)
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    B. Sanders represents a movement towards evolution. We can not stand to believe this democracy is the ultimate government. There will always be room for improvement, especially when there are serious corruption accusations. We must continue improving our government, and our nation as a whole. I believe Bernie is the main contender in driving our country into the future.
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    No more raising taxes!!! We already paid into our own social security accounts. We should not have to pay more to get our own money back just because the federal govt mismanaged that fund!
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    I just think it's time we adopt further democratic socialist policies, and use the wealth afforded to us by capitalism to even the playing field for us all.
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    Slowly phase it out over the next 50 years by allowing people to manage half the value of their contributions, then choose if they want to receive that accrued value at age 70 in lieu of social security benefits.
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    Sure, I like the idea that when my income is high enough that I'll stop making social security payments for part of the year. But right now I think that cutoff is far too low and that raising the limit (rather than the percentage withheld) will go a long way to keeping social security solvent. Is that limit the same as when social security was created? If so, then it needs a serious inflation adjustment.
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