President Joe Biden said in the debate Thursday night that he can save Social Security by hiking payroll taxes on the wealthy. He asserted that this tax hike would be enough to cover Social Security’s shortfall.
Here’s what Biden said:
“The idea that they’re going to — I’m not — I’ve been proposing that everybody, they pay — millionaires pay 1% — 1%. So no one after — I would not raise the cost of Social Security for anybody under $400,000. After that, I begin to make the wealthy begin to pay their fair share, by increasing from 1% beyond, to be able to guarantee the program for life.”
It’s not clear from his words, but Biden is talking about the fact that workers only pay Social Security, or payroll, taxes on the first $170,000 of income because they only earn Social Security benefits for the first $170,000 of income. Biden wants to hike taxes on high-income people, but he promised not to hike taxes on anyone earning less than $400,000.
Biden’s proposal, then, is to pause Social Security taxes — you would pay none on any income between $170,000 and $400,000 and then you would resume paying Social Security taxes after $400,000.
Jake Tapper, who did a very good job moderating, asked a key follow-up: “Are there any other measures that you think that would be able to help keep Social Security solvent, or is just — is that one enough?”
Biden said, “Well, that one enough will keep it solvent.”
This is flatly false, but the Biden White House has been peddling this line for a while.
But Biden knows, or should know, that this won’t work. Hiking Social Security taxes on the very rich won’t be enough to close the Social Security gap.
I noted earlier this month: “In the long run, eliminating the cap would leave almost two-thirds of the funding gap unfilled, the Social Security Administration calculates.”
CLICK HERE TO READ MORE FROM THE WASHINGTON EXAMINER
And that calculation didn’t exempt Biden’s donut hole of $170,000 to $400,000. So Biden must be talking about much higher tax on income over $400,000 — not merely the 6.2% tax rate workers currently pay. This would be on top of the 32% to 37% federal income taxes that these high earners are already paying, plus the 2.8% in Medicare taxes.
Nobody believes that Biden could create a tax rate, or will propose a tax rate, on high income that will be enough to make Social Security solvent.
