Washington Urged to Lift Social Security Wage Cap to $400,000 and Raise Retirement Age to 70
Updated
Updated · Fox News · Sep 18
Washington Urged to Lift Social Security Wage Cap to $400,000 and Raise Retirement Age to 70
3 articles · Updated · Fox News · Sep 18
Summary
Three proposed fixes would spread Social Security’s burden across higher earners, all workers and younger retirees: tax wages up to $400,000, lift the payroll rate from 6.2% to 7.2%, and move full retirement age to 70 for people born after 1990.
The argument is that Social Security is not about to hit zero cash flow; even if trust fund reserves are depleted, ongoing payroll taxes would still cover part of benefits, but not 100% of scheduled payments.
At the current 12.4% combined employer-employee rate, raising the taxable wage ceiling from $184,500 to $400,000 would expose another $215,500 in wages for a $400,000 earner and could bring in well over $1 trillion over a decade.
A gradual tax-rate increase would add about $75 in the first year for a worker earning $75,000, while the retirement-age change would spare current near-retirees and give younger Americans decades to adjust.
The broader case is political as much as fiscal: Republicans resist tax hikes, Democrats resist benefit cuts, and delaying action could force harsher changes later.
If higher payroll taxes and wage caps cost millions of jobs, is there a completely different way to fund retirement in an aging society?
If the Social Security trust fund depletes by 2032, what hidden economic ripple effects will a sudden 20% benefit cut unleash on everyday Americans?
Could raising the retirement age to 70 for younger workers inadvertently penalize lower-income earners who are physically unable to delay their retirement?