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Warren Says Higher Earners Should Pay More · Commentary - TJ Meadows

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  Speaker 1: Senator Elizabeth Warren believes she's found a straightforward way to
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  Speaker 1: help shore up Social Security. Tax more income. This year,
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  Speaker 1: you pay Social Security taxes on the first $ 184, 500 you earn.
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  Speaker 1: Warren argues that's unfair. A nurse making $ 80, 000 pays Social
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  Speaker 1: Security tax on every dollar of wages. Someone making $ 500, 000 doesn't.
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  Speaker 1: Sounds compelling. but it leaves out something rather important. There's
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  Speaker 1: a reason the tax stops at $ 184, 500. Your Social Security
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  Speaker 1: earnings record stops there, too. Social Security wasn't designed as
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  Speaker 1: just another income tax. It was designed as social insurance.
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  Speaker 1: You work, you contribute, and what you earn and contribute
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  Speaker 1: helps determine your eventual benefit. There's a ceiling on both
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  Speaker 1: sides of that equation. Does the government tell someone making $ 500, 000
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  Speaker 1: will calculate your Social Security benefit as though you made $ 500, 000?
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  Speaker 1: It doesn't. For Social Security purposes, income above $ 184, 500 is
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  Speaker 1: not counted toward your benefit. In fact, a worker who
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  Speaker 1: consistently earned at least the taxable maximum and retires at
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  Speaker 1: full retirement age in 2026 can receive a maximum benefit
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  Speaker 1: of about $ 4, 000 $ 152 a month. Earn $ 184, 500, potentially $ 4, 152.
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  Speaker 1: Earn $ 500, 000, still $ 4, 152. Earn $ 5, 000, 000, $ 4, 152. So if we
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  Speaker 1: ask why the person making $ 500, 000 doesn't pay Social Security
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  Speaker 1: tax on every dollar, we should also ask why that
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  Speaker 1: person doesn't earn Social Security benefits on every dollar. Same answer.
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  Speaker 1: Social security has what is literally called a contribution and
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  Speaker 1: benefit base. Congress can change that. But if lawmakers eliminate
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  Speaker 1: the contribution ceiling while keeping the benefit ceiling, they're changing
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  Speaker 1: the relationship between what people pay into social security and
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  Speaker 1: what they can receive from it. Maybe that's a policy
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  Speaker 1: Congress wants to debate. Fine. And social security absolutely has
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  Speaker 1: a financing problem Congress must confront. But make the rich
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  Speaker 1: pay more? doesn't fully explain the current system. And Americans
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  Speaker 1: deserve to understand the distinctions before Congress makes any changes.