Millionaires—those on a payroll, anyway—were done paying their Social Security taxes on February 16, 2017. And Senator Bernie Sanders (I-Vt.) and Pete DeFazio (D-Ore.) chose the same day to introduce a bill that would expand Social Security benefits by lifting the cap on earnings subject to payroll taxes.
The Huffington Post reported that as the rest of the country slogged on under payroll tax deductions for Social Security benefits, Americans who earned wages of $1 million or more had already finished paying their Social Security obligations for the year.
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At present, the tax is based only on the first $127,200 earned each year, but the bill introduced by Sanders and DeFazio would instead apply the 6.2 percent payroll tax to ordinary earnings of $250,000 or more, as well as to unearned income, such as capital gains and dividends, above that level.
In addition, the bill would not increase benefits for high earners based on the additional contributions, but instead would apply that additional funding to keep Social Security solvent until 2078.
In addition, the extra money would increase benefits for all, but would provide a greater impact for low earners.
At a press conference, Sanders, who was joined not only by DeFazio but also by Democratic Sens. Ron Wyden (Ore.) and Elizabeth Warren (Mass.), Democratic Reps. Jan Schakowsky (Ill.) and Paul Tonko (N.Y.) and representatives from progressive organizations including Social Security Works, the National Committee to Preserve Social Security and Medicare and the Alliance for Retired Americans, said, "We can expand benefits, we can extend the life of Social Security, if we have the guts to tell the millionaires and billionaires, yes, they are going to have to pay a bit more in taxes."
A study from the Center for Economic and Policy Research has found that just 1.6 percent of American workers make $250,000 a year or more, highlighting the fact that the Sanders-DeFazio bill would affect relatively few individuals while having a beneficial effect on many more.
Warren was quoted in the article saying that Trump's appointment of Rep. Mick Mulvaney (R-S.C.) as director of the White House Office of Management and Budget shows that Trump "has already turned his back on his promise to protect Social Security."
Mulvaney has in the past referred to Social Security as a "Ponzi scheme" and supported benefit cuts including increases in the retirement age.
"That's who Donald Trump put in charge of delivering a budget to the American Congress," Warren said at the news conference, referring to Mulvaney. "Well, I'm here to say, those budgets that cut Social Security will go down in flames. We will fight back."
While the bill stands almost no chance of passage in the Republican-controlled Congress, it does provide a very obvious opportunity for Democrats to point out that the president has abandoned campaign promises not to cut Social Security and Medicare.
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