Reforming Taxes for a Fair Retirement
Every year, Social Security and Medicare prevent numerous American elders from facing poverty and insolvency due to medical expenses. Advocates for economic fairness have consistently argued that these programs could be strengthened and their solvency extended if wealthier Americans paid more into them. On Thursday, this idea took legislative form as two Democratic politicians introduced a bill aiming to adjust financial contributions by high-income earners.
The bill, named the Medicare and Social Security Fair Share Act, was reintroduced by Senator Sheldon Whitehouse (D-R.I.) and Representative Brendan Boyle (D-Pa.). It proposes that individuals earning over $400,000 annually should contribute a proportional share of their income to these crucial programs.
At present, American workers only need to pay Social Security taxes on earnings up to approximately $176,000. This cap would be removed by the proposed bill, which seeks to standardize the tax rate for high-income earners on all income above this threshold, as explained by the legislators in a media release.
The proposal also suggests a 1.2% increase in the Medicare tax rate for incomes exceeding $400,000 and includes measures to prevent hedge fund and private equity firm owners from dodging Medicare taxes.
The introduction of this bill comes as the Trump administration and Republican members of Congress are looking to reduce Social Security. This week, they moved forward with appointing Frank Bisignano—a Wall Street executive and supporter of billionaire Elon Musk’s budget cuts at the Department of Government Efficiency (DOGE)—to oversee the program.
“While Republicans are promoting a $7 trillion tax cut for the wealthiest, we are striving to safeguard the benefits that millions of Americans have rightfully earned—and we refuse to allow these to be compromised to fund luxuries for billionaires,” said the Democrats in response.
Further, Republicans are considering cuts to Medicare as a means to finance tax reductions for the richest Americans and are advocating for the expansion of privatized Medicare Advantage plans.
Senator Whitehouse remarked, “Working-class seniors contribute to Social Security and Medicare throughout their careers, hoping for a respectable retirement. Yet, they find themselves paying significantly more of their income in taxes compared to billionaires, due to a tax system skewed in favor of the wealthy. As the Trump administration and Congressional Republicans prepare to enact massive tax breaks for their billionaire benefactors, I am committed to ensuring our tax code is equitable and to defending these essential components of retirement security indefinitely.”
According to estimates from actuaries at the Centers for Medicare and Medicaid Services and the Social Security Administration, the changes proposed by Whitehouse and Boyle could extend the financial health of Social Security and Medicare for at least another 75 years.
Without the introduction of new funds, the trust funds that finance both Medicare and Social Security will only remain fully solvent through 2036 and 2033, respectively.
The legislation has received support from various organizations, including Social Security Works, the National Council on Aging, and the Center for Medicare Advocacy.
“From the moment I entered Congress, I have been committed to preserving the longevity of Social Security and Medicare—two foundational commitments our nation has made to its seniors, workers, and disabled individuals,” stated Boyle. “Now, with Donald Trump, Elon Musk, and billionaires influenced by DOGE openly targeting these programs, our fight to protect them has never been more critical.”
“While Republicans push forward a $7 trillion tax favor to the ultrarich,” he continued, “we are dedicated to defending the benefits that millions of Americans have earned—and we will prevent these from being eroded to finance another round of billionaire bonuses.”
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An economic reporter, Dax Everly breaks down financial trends and their impact on Americans’ daily lives.