Social Security is a popular program, and most people want to preserve it. Many people are also aware that the program's trust fund is slated to run dry within the coming years so they want to take steps to shore up its finances to avoid automatic benefit cuts.
The big question is, what are people willing to do to protect Social Security? Recent research from the Program for Public Consultation at the University of Maryland revealed some key changes respondents were willing to make.
1. Increasing Social Security taxes on the wealthy
According to the survey, 79% of Republicans and 88% of Democrats wanted to see wealthy people pay more Social Security taxes in order to deal with the retirement program's funding problems.
Currently, Social Security taxes apply on all wages up to a set amount of earnings called the wage base limit. For 2022, workers pay Social Security tax on up to $147,000 in income but no more. A total of 81% of Americans across all parties want to make wages above $400,000 also subject to Social Security tax.
This would be a big change. Right now, benefits are directly linked to the total taxes you pay in. If this shift occurred, wealthy Americans would be taxed on income above $400,000 but wouldn't see a resulting increase to their benefits. The extra money they bring in would eliminate 61% of the program's shortfall.
2. Increasing Social Security taxes on everyone
Americans aren't just willing to make the rich pay more taxes. They're OK with everyone paying more if necessary.
A total of 73% of people, including 70% of Republicans and 78% of Democrats, said they would be in favor of increasing the current Social Security tax from 6.2% of employee wages to 6.5%. This change would also eliminate 16% of the shortfall.
3. Raising the retirement age
A total of 3/4 of Americans would be willing to wait longer to get their full benefit if necessary. Both 75% of Republicans and 76% of Democrats said the full retirement age (FRA) should gradually go up to 68. This is the age when you can get your standard benefit without seeing it reduced by early filing penalties.
FRA is currently between 66 and four months and 67 for those born in 1956 or later. Changing it to 68 would reduce 11% of the shortfall. This would be a de facto benefits cut for everyone, since people who claimed early would get a smaller monthly benefit for life. And those who waited until FRA would miss at least a year of extra benefits if FRA is changed.
4. Reducing retirement benefits for higher earners
Finally, 81% of Americans, including 78% of Republicans and 86% of Democrats, indicated they'd be OK with higher earners getting less benefits. Specifically, people are on board with cutting the Social Security checks available to the top 20% of earners. This change would eliminate 11% of the shortfall.
This would also be a big change because, as mentioned above, currently benefits are directly based on how much you earn and pay taxes on.
It's not clear if lawmakers will heed the public's call to make any of these modifications. But the survey provides some encouraging news in that it shows people are willing to do what it takes to protect Social Security for future generations, even if that requires sacrifice.
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