Elizabeth Warren Plans to Boost Social Security Spending by Hiking Taxes on the Rich
(Bloomberg) — Elizabeth Warren released a plan Thursday to expand Social Security benefits by $200 per month with a payroll tax increase on incomes above $250,000, her latest attempt to court voters who want a larger safety net.Her proposal would impose a 14.8% tax on annual earnings above $250,000 (or $400,000 for joint filers), split evenly between employers and employees. It would impose a separate $14.8% tax on investment income.
The policy, if enacted, would raise average monthly Social Security benefits from $1,395 to $1,595 if implemented in 2020, according to an analysis by economist Mark Zandi of Moody’s Analytics that was shared by Warren’s campaign.
It would index Social Security benefits to a faster rate of inflation and bolster benefits for widows and widowers and caregivers of children younger than six.
All told, Warren’s plan would extend the solvency of Social Security by about two decades to 2054, Zandi said.
“We need to get our priorities straight. We should be increasing Social Security benefits and asking the richest Americans to contribute their fair share to the program,” Warren wrote in a post for medium.com, calling her plan “the biggest and most progressive increase in Social Security benefits in nearly half a century.”
Warren’s proposal indicates how far Democrats have moved since 2011, when President Barack Obama offered to cut Social Security benefits as part of a “grand bargain” compromise with Republicans to reduce the deficit. It’s in keeping with Warren’s broader policy pitch to enhance the middle class safety net by taxing upper incomes.
Her policy paper comes on the day of the third Democratic debate in Houston, the first time all of the four leading contenders will be on stage together.
She follows rival Bernie Sanders, a fellow senator and rival for the Democratic nomination, who pushed for an expansion of Social Security benefits during his unsuccessful 2016 presidential campaign. Legislation by Sanders to expand Social Security has been cosponsored by 2020 contenders Kamala Harris and Cory Booker.
The Warren and Sanders plans are unlikely to become law in the near future as Republicans, who control the White House and the Senate, oppose raising payroll taxes and prefer to tackle Social Security’s long-term problems by reducing benefits.