Joe Biden's Proposal for Social Security: Taxing the Rich and Its Implications

Saturday, 30 March 2024, 07:44

President Joe Biden's four-point plan to bolster Social Security by taxing the wealthy is under scrutiny. While the proposal aims to extend the program's solvency, experts suggest it falls short in addressing the long-term funding shortfall. Analysts reveal potential consequences for the U.S. economy, including reduced GDP and labor supply distortions.
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Joe Biden's Proposal for Social Security: Taxing the Rich and Its Implications

Joe Biden's Proposal for Social Security

The President's plan to strengthen Social Security faces challenges and scrutiny.

Social Security's Financial Outlook

  • The program's estimated funding shortfall has grown significantly, surpassing $22 trillion.
  • The OASI Trust Fund could exhaust its asset reserves by 2033, leading to potential benefit cuts.

Biden's Four-Point Plan

  1. Increasing Payroll Taxation: Proposes taxing the wealthy on earned income above $400,000.
  2. Shifting Inflation Index: Switches to CPI-E to provide more accurate COLAs for beneficiaries.
  3. Raising Special Minimum Benefit: Aims to increase the benefit to 125% of the federal poverty level.
  4. Lifting Primary Insurance Amount: Calls for a gradual increase to PIA for older beneficiaries.

Analyses show that while the proposal may extend solvency, it lacks in addressing the program's long-term funding challenges.


This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.


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