Moreno, Warren Push Lifting $184,500 Payroll Tax Cap to Avert 20% Social Security Cuts
Updated
Updated · The New York Times · Jun 23
Moreno, Warren Push Lifting $184,500 Payroll Tax Cap to Avert 20% Social Security Cuts
1 articles · Updated · The New York Times · Jun 23
Summary
Bernie Moreno and Elizabeth Warren urged Congress to lift Social Security’s $184,500 payroll tax cap, arguing the change would help shore up the program without cutting retiree benefits.
Late 2032 is the key deadline: the trust fund that pays most beneficiaries is projected to be significantly depleted by then, which the senators say could trigger benefit cuts of more than 20%.
Under current law, workers and employers each pay 6.2% Social Security tax only on wages up to $184,500 in 2026, while self-employed people pay 12.4%, leaving earnings above that threshold untaxed for Social Security.
The bipartisan proposal frames the cap increase as a fairness fix, saying most Americans already pay Social Security taxes on 100% of their wages while the highest earners pay on only part of theirs.
Beyond raising taxes, what other ideas like benefit limits are being seriously considered to fix Social Security?
With Social Security's shortfall at $27 trillion, can lifting one tax cap truly save the system?
Preventing a 22% Cut: The Moreno-Warren Proposal and the Future of Social Security Funding
Overview
Social Security is a crucial source of income for millions of Americans, especially older adults and disabled workers, but it faces an urgent funding challenge. The program’s reserves are projected to run out by 2032, mainly because its funding relies on payroll taxes that only apply to earnings below a set cap. This means high earners pay Social Security taxes on just part of their income, while most people pay on all their earnings. As a result, a significant shortfall is expected, making it essential for lawmakers to find bipartisan solutions to secure Social Security’s future.