Bernie Sanders would like to talk about Social Security

By Helaine Olen
Opinion writer
February 13 at 7:00 AM

Excerpt:

One man firmly in the latter camp is Sen. Bernie Sanders (I-VT.), who is bringing back his Social Security Expansion Act on Wednesday. The day selected is no accident: Wednesday also marks something Social Security activists call Scrap the Cap Day, an annual event designed to highlight how little millionaires pay into the system.

As the Center for American Progress (CAP) notes in a report also released Wednesday, the Social Security trust fund would contain a lot more money if it weren’t for the payroll tax cap, which is set at $132,900. In 1983, 90 percent of total earnings were taxed by Social Security. Today, it’s 83.4 percent. The reason? As the wealthy’s income rose while that of the remainder of the population essentially stagnated, the cap shielded an increasing percentage of funds from Social Security taxes. As the CAP report goes on to explain, based on the $694 million annual income Donald Trump claimed he earned in a 2016 debate with Hillary Clinton, “he ceased contributing to Social Security 40 minutes into the new year.”

Sanders would like to do something about that. His plan shares a lot of similarities with one introduced by Rep. John B. Larson (D-Conn.) two weeks ago. Both would increase payments to lower-income recipients. Both would also change the cost-of-living calculation to account for the fact that older Americans experience more inflation than their younger peers, courtesy of their greater need for health care.

But there are differences. Sanders’s bill would allow children of people who are disabled or have died to collect benefits till they are 22 as long as they are in school full-time. (This benefit currently cuts off at age 18.) The finances of the two bills are slightly different as well. Larson eliminates the tax cap at $400,000 in income, and doesn’t count investment earnings. At the same time, he would raise the payroll tax by a small amount on everyone. Sanders’s effort, on the other hand, doesn’t raise the payroll tax but eliminates the system’s tax cap at $250,000 and counts all earnings toward that number. “We are living at a time of massive wealth and income inequality, and much of the income of the wealthy comes from dividends and capital gains. If we are serious about making sure those people pay their fair share, those need to be included as well,” he told me in a Tuesday interview. This change, he says, would impact just under 2 percent of workers.

https://www.washingtonpost.com/opinions/2019/02/13/bernie-sanders-would-like-talk-about-social-security/