“They were careless people, Tom and Daisy - they smashed up things and . . . then retreated back into their money . . . and let other people clean up the mess they had made.” - F. Scott Fitzgerald, The Great Gatsby
Social Security is perhaps the most popular government (i.e., socialist) program in the U.S. today. It is also the program that - perhaps - touches more people than any other besides, well, income taxes. Per a Pew Research Center article, “79% of U.S. adults said Social Security benefits shouldn’t be reduced in any way – a view broadly shared across ages, racial and ethnic groups, partisan affiliations and income brackets.”
At a July 27, 2024 campaign rally in St. Cloud, Minnesota, Trump bluntly stated, “I will not cut one penny from Social Security or Medicare,".
Of course, he lied about Medicare (the OBBBA passed by Republicans in 2025 increases the federal deficit, which can trigger automatic Medicare spending cuts under an existing law called the Statutory Pay-As-You-Go (PAYGO) Act of 2010) and he likely is lying about Social Security as well.
According to the 2026 Social Security Trustees Report, the Old-Age and Survivors Insurance (OASI) Trust Fund - which pays retirement and survivors benefits - is projected to deplete its reserves in the fourth quarter of 2032. At that point, continuing payroll tax revenue would be sufficient to pay 78% of scheduled OASI benefits. However, if the retirement and disability trust funds are considered together (the combined OASDI trust funds), reserves are projected to be depleted in 2034, after which 83% of scheduled benefits could be paid from ongoing income.
Whelp! Not what the American people want, right?
I recently came across an article in Bloomberg opinion by Kathryn Anne Edwards (behind a paywall but I will excerpt parts below) about how to “Fix” Social Security. The title of the opinion piece is “Social Security Reform Can Be Achieved in Six Words”.
Edwards writes (bold emphasis mine):
Far and away the most popular proposal related to Social Seucrity si to eliminate the tax cap. Currently, about $185,000, the cap functions as a hated delineator: All American pay the same shar einto Social Security, except for the 6% who earn above that amount. Scrapping the cap is popular among both Republicans (65%) and Democrats (73%), and it would cover at least half the shortfall.
So scrap it. It would be a win for the left, and meaningful for Congress to acknowledges that, when the time came to fix Social Security, the first thing it did was to make the richest pay the same share as the poorest.
It would be tempting to look for a win for the right through some kind of benefit cut. But Republican voters - like most Americans - don’t want to see benefits cut. Besides, the classic longstanding conservative argument against Social Security is not that benefits are too generous, but that they are a waste of savings given what workers could gain from investing in the market. It’s a stretch to believe that 170 million workers would prefer to navigate the stock market, with all its risks, instead of accepting a lifetime, inflation-adjusted guaranteed income - and it’s an even bigger stretch to think that most would be successful at it. But conservatives are absolutely correct: Social Security is insulated from the wealth gains the stock market offers.
So invest it. But rather than forcing individuals to invest and take on the risk of failure, invest the Trust Fund.
There’s a lot to unpack here, so I’ll narrow it down:
“…except for the 6% who earn above that amount.” Let’s be clear. Republicans in Congress and the Trump Admin are protecting the top 6% of U.S. earners at the expense of the remaining 94% of workers. For Republicans, it’s taxes for the worker bees but not for the bosses.
“Besides, the classic longstanding conservative argument against Social Security is not that benefits are too generous.”. Actually - This Is. Not. True. The Republican adjacent Cato Institute wrote: "Social Security is pure welfare, not an individual savings program." And prominent Republicans continue to call Social Security and “entitlement”, implying that it is not earned or deserved.
“…but that they are a waste of savings given what workers could gain from investing in the market.”, and “instead of accepting a lifetime, inflation-adjusted guaranteed income…”. Investing in the market is risky. Yes - stocks trend upwards over time, however, the stock market doesn’t always go up, and there are several periods since its inception when stock indexes have taken years to return to previous highs (there have been several instances where it has taken 5 years - and up to 15 years - for stock indexes to recover).
Additionally, Social Security IS essentially a “defined contribution pension” for workers. In order to have an “inflation-adjusted guaranteed income”, the Trust Fund MUST be invested in low risk financial instruments.
“Social Security is insulated from the wealth gains the stock market offers.” Correct. See my previous bullet-point argument. The stock market offers wealth gains and - sometimes - wealth losses.
One more point. Even if we get rid of the income cap on payroll taxes for Social Security, we won’t be taxing the majority of income to the top 6%. Because those in the top 1% - and even more so for the top 1/10 of 1% - get much, if not most, of their income from non-salaried sources such as stock options, stock awards, and dividends/interest on investments.
Example: While a wealthy heir who relies on interest/dividends and who doesn’t ever need to work - won’t receive Social Security (you actually need to contribute into the program to receive benefits) - they still rely on the “benefits” of living in our society and, IMHO, should contribute into the Social Security system for others who do the actual work that allows them to skate by.
In fact, there is a saying - “Buy, Borrow, Die” that allows the ultra-wealthy to avoid both capital gains AND Social Security taxes:
Buy – Accumulate appreciating assets, such as stocks, real estate, or ownership in a private company.
Borrow – Instead of selling those assets (which would trigger capital gains taxes), borrow against them using securities-backed loans, margin loans, or lines of credit. The loan proceeds are generally not taxable income under U.S. law because loans must be repaid.
Die – When the owner dies, many appreciated assets receive a "step-up in basis" under current U.S. tax law. This means the tax basis is generally reset to the asset's fair market value at the date of death (or an alternate valuation date if elected for estate tax purposes). As a result, unrealized capital gains that accrued during the owner's lifetime may never be subject to federal capital gains tax if the heirs sell shortly after inheriting the assets.
So let’s include all income in Social Security taxes for the top centi-millionaires and billionaires.
Edwards ends her opinion piece with this sentence:
I didn’t even need 500 words. In fact, I can do it in six: Scrap the cap, invest the rest.
Here’s my slightly adjusted take:
Scrap the cap, close the gap, make sure the privileged have our back.
