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applegrove

(119,216 posts)
Sat Nov 9, 2013, 11:24 PM Nov 2013

"A Booster Shot for Social Security" [View all]

A Booster Shot for Social Security

BY Sarah Jaffe at In These Times

http://inthesetimes.com/article/15844/lifting_the_cap_on_social_security/

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That was Sen. Sherrod Brown (D-Ohio), who made news this week as the latest Democrat—and one from a key swing state—to sign on to a bill calling for expanding, not cutting Social Security benefits. Brown spoke on a conference call today hosted by the Progressive Change Campaign Committee, telling media and PCCC members why he's decided to cosponsor Tom Harkin's (D-Iowa) Strengthening Social Security Act of 2013. The bill is also cosponsored by two other Democratic senators, Mark Begich of Alaska and Brian Schatz of Hawaii.

“We don’t want to reform entitlements [the Republican] way,” explained Brown. “We want to do things like lifting the cap.”

Brown is referring to the fact that Social Security taxes are only collected on the first $113,700 of your annual income. If you make more than that, it's tax-free, meaning the Social Security tax winds up being fairly regressive: The more money you make, the smaller a proportion of your income goes to Social Security. Phasing out that cap, as the Harkin plan proposes, would mean that people who make hundreds of thousands or even millions a year would still pay the same rate, but they’d pay it on all the money they make.

Removing the cap would create more money for Social Security benefits. To decide who gets that money, the Harkin plan would calculate cost-of-living increases using a specifically calculated consumer price index (CPI), called CPI-E, that takes into account that costs such as healthcare and housing tend to be higher for seniors. According to Harkin's office, the bill would “boost benefits for all Social Security beneficiaries by approximately $70 per month, but is targeted to help those in the low and middle of the income distribution.”




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