Senator Bernie Sanders Introduces Bill to Apply Payroll Tax to High Incomes

I’m sure most of the corporate media will ignore this, but Senator Bernie Sanders today introduced a bill to “strengthen Social Security” by applying payroll taxes to all income–including from self-empoyment–to people earning more than $250,000 annually. So far I’ve only seen this reported by one national media outlet.

The Hill:

Sanders and other liberals are concerned Obama may strike a deficit-reduction deal with Republicans that would reduce Social Security benefits by adopting a less generous way of adjusting benefits for inflation.

Sanders on Thursday introduced legislation co-sponsored by Senate Majority Leader Harry Reid (D-Nev.) to raise payroll taxes on the wealthy to extend the solvency of Social Security.
Democratic Sens. Barbara Boxer (Calif.), Amy Klobuchar (Minn.), Sheldon Whitehouse (R.I.), Al Franken (Minn.) and Richard Blumenthal (Conn.) have co-sponsored the bill as well.

Representative Peter De Fazio is introducing a companion bill in the House.

“Social Security is facing an unprecedented attack from those who either want to privatize it completely or who want to make substantial cuts,” said Sanders at a press conference. “The argument being used to cut Social Security is that because we have a significant deficit problem and a $16.6 trillion national debt, we just can’t afford to maintain Social Security benefits.

“This argument is false. Social Security, because it is funded by the payroll tax, not the U.S. Treasury, has not contributed one nickel to our deficit,” he said.

Sanders estimates switching to a chained-CPI formula for determining benefits for Social Security would result in the average 65 year old living on about $15,000 a year receiving $650 less each year when they turn 75 and $1,000 less a year when they turn 85.

The bill is supported by (PDF) “The Strengthen Social Security Campaign, comprised of more than 320 organization throughout the country representing more than 50 million Americans, including the National Committee to Preserve Social Security and Medicare; AFL-CIO; United Steelworkers; Alliance for Retired Americans; Social Security Work; Campaign for Community Change; The Arc.”

The AARP announced yesterday that it is going to be running ads

If you haven’t read the op-ed by Thomas Edsall (The War on Entitlements) in today’s New York Times, I hope you will take the time to do so now. Thanks to RalphB for posting the link on the morning thread! Here’s the introduction:

The debate over reform of Social Security and Medicare is taking place in a vacuum, without adequate consideration of fundamental facts.

These facts include the following: Two-thirds of Americans who are over the age of 65 depend on an average annual Social Security benefit of $15,168.36 for at least half of their income.

Currently, earned income in excess of $113,700 is entirely exempt from the 6.2 percent payroll tax that funds Social Security benefits (employers pay a matching 6.2 percent). 5.2 percent of working Americans make more than $113,700 a year. Simply by eliminating the payroll tax earnings cap — and thus ending this regressive exemption for the top 5.2 percent of earners — would, according to the Congressional Budget Office, solve the financial crisis facing the Social Security system.

So why don’t we talk about raising or eliminating the cap – a measure that has strong popular, though not elite, support?

I think we all know the answer to that question, don’t we?