At a glance
- Bernie Sanders aims to raise Social Security benefits by at least $2,400 a year and keep the program solvent "for generations" by scrapping the payroll-tax cap, Morningstar — Financial Advice reported.
- Scrapping the cap means removing the taxable maximum — $184,500 now and $192,300 in 2027 under current law — the level above which earnings escape Social Security tax.
- In client tax projections, the wage cap is the input that would change.
Sen. Bernie Sanders aims to raise Social Security benefits by at least $2,400 a year and keep the program solvent "for generations" by scrapping the payroll-tax cap, Morningstar — Financial Advice reported. Sanders, expected to chair the Senate Social Security subcommittee, said Saturday on X that the money would come from "demanding that the wealthy pay their fair share of taxes."
Scrapping the cap means removing the taxable maximum — $184,500 now and $192,300 in 2027 under current law — the level above which earnings escape Social Security tax.
In client tax projections, the wage cap is the input that would change. Social Security faces insolvency in 2032, when benefits would be cut 22% unless Congress acts.
Sen. Bill Cassidy, a Louisiana Republican, said Sunday on X that the plan would tax people "a long way from being millionaires or billionaires," citing two married ICU nurses facing a 12.4% tax. Cassidy has proposed placing $1.5 trillion over five years in an investment fund separate from the trust fund, held in escrow for 70 years.
Reported by The Advisor's Note desk from Morningstar — Financial Advice. Published . Corrections