Cuts Taxes, Strengthens Benefits, Ensures Social Security Through This Century
Over 11 million Social Security recipients would see a tax cut: Presently, your Social Security benefits are taxed if you have non-Social Security income exceeding $25,000 for an individual or $32,000 for couples. This would raise that threshold to $50,000 and $100,000 respectively.
Benefit bump for current and new beneficiaries: Provides a modest increase for all beneficiaries starting in 2016, equivalent to 2% of the average benefit.
Protection against inflation: Improves the annual cost of living adjustment (COLA) formula to better reflect the costs incurred by seniors through adopting a CPI-E formula. This provision will help seniors who spend a greater portion of their income on health care and other necessities and improved inflation protection.
Protect low income workers: No one who paid into the system over a lifetime should retire into poverty. The new minimum benefit will be set at 25% above the poverty line rather than below it. It would be indexed to wages to ensure that the minimum benefit does not fall behind.
Ensures Social Security through This Century
50 cents per week to keep the system solvent: Gradually phase in an increase in the contribution that, for the average worker, equals an additional 50 cents per week every year to keep the system solvent. From 2080-2084, the contribution rate would rise an additional 0.25% to ensure solvency beyond the next 75 years (83% of Americans support a gradual increase in the contribution rate).
Have millionaires and billionaires pay the same rate as everyone else: Presently, payroll taxes are not collected on wages over $117,000. This legislation would apply the payroll tax to wages above $400,000. This provision would only affect the top 0.4% of wage earners (supported by Americans 80% to 20%).
Address the Disability Insurance trust fund: The Disability Insurance (DI) program is a vital part of the Social Security system. However, the DI fund is projected to become depleted in 2016. This bill would include a payroll tax reallocation to ensure the solvency of the DI program. This technical fix would not affect the projected solvency of the Social Security Trust Fund.