How Would the Social Security 2100 Act of 2023 Work?

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( – The Social Security 2100 Act of 2023 is a bold legislative move aimed at reinforcing Social Security for future generations. With the looming prediction that, come 2035, the program may only be able to cover three-quarters of its promised benefits, this Act couldn’t be timelier. Crafted by Democratic Congressman John Larson, the Act proposes to levy taxes once again on the top 1.8 percent of earners—those with incomes surpassing $400,000 annually.

According to Newsweek, this initiative comes after a 52-year gap with no major improvements to the Social Security system. The current system places a cap on earnings over $160,200 from Social Security taxes in 2023, but Larson’s plan introduces a gap in this tax, where incomes between $160,200 and $400,000 would not be taxed for Social Security, effectively protecting the middle class. Earnings above this would be taxed, ensuring those with the broadest shoulders carry the heaviest load.

Newsweek provided an example, reporting that if someone earns $1 million a year, they would pay Social Security taxes on the first $160,200 and then again on any earnings over $400,000. This equates to an annual contribution of $47,132.40 for such high earners.

Beyond taxation, Larson’s Act is comprehensive, aiming to boost benefits by 2 percent for all, refine cost-of-living adjustments, and merge various trust funds for efficiency. It also aims to incrementally increase the annual balance of Social Security.

Democrats have rallied behind this Act, portraying it as a commitment to safeguard and strengthen Social Security. Larson, echoing this sentiment, describes it as a measure against Republican efforts to deconstruct the program. Max Richtman, a proponent of the bill, believes it’s fair for the wealthy to pay more, resonating with President Joe Biden’s philosophy of a “sacred trust” with retirees.

However, not everyone is sold on the Act. Alicia Munnell, a former Treasury official, has reservations, especially regarding the Act’s ambitious revenue targets and the permanence of benefit increases, which she argues could impose future financial burdens.

Amidst these debates, the bill has drawn some bipartisan support, particularly for raising the payroll tax cap. While it’s clear that Social Security’s financial health needs attention, the path forward requires a blend of immediacy and foresight, balancing short-term fixes with the program’s enduring stability.

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