Americans are willing to pay more taxes to protect Social Security benefits for two often-overlooked groups: caregivers and older workers with physically demanding jobs. A recent National Academy of Social Insurance (NASI) survey shows that 85 percent of respondents support raising taxes to secure the program’s longevity. The Social Security Administration projects potential funding shortfalls in the coming decades, with the Old Age and Survivors Insurance (OASI) Trust Fund expected to pay full benefits only until 2033.
After that, it will cover about 77 percent of scheduled benefits. The NASI survey, conducted in collaboration with AARP, the National Institute on Retirement Security, and the U.S. Chamber of Commerce, highlights broad bipartisan support for reforms to strengthen the program. Key proposals include a caregiving credit for individuals who take time out of the workforce to care for children under six and a bridge benefit for older workers with histories of physically demanding work.
Nearly 60 percent of respondents support the caregiving credit, and over 60 percent back the bridge benefit for older workers. To fund these enhancements, 82 percent of respondents favored eliminating the cap on payroll tax contributions for earnings above $400,000 and gradually increasing the payroll tax rate from 6.2 percent to 7.2 percent for employers and employees.
Americans favor tax increases for continuing Social Security
Tyler Bond, research director at the National Institute on Retirement Security, noted that the public supports this policy package, which fully closes the existing financing gap while generating a small surplus. However, Alex Beene, a financial literacy instructor for the University of Tennessee at Martin, warned that extending benefits to those not actively contributing increases the burden on Social Security funding. While the proposal is gaining traction among policymakers, it remains uncertain if Congress will proceed with these changes.
Instead, recent bills in Congress are focusing on ending taxes on Social Security, such as the Reducing Excessive Taxation and Inefficiencies by Reforming Elder Exemptions to Support Fairness, Inflation Relief, and Simple Taxes (RESIST) Act. As the possibility of Social Security benefit cuts looms, it is crucial to have a backup plan. One approach is to save more for retirement, aiming to save beyond the recommended 15% to 20% of income.
Starting slowly and gradually increasing savings year after year can make saving 25% of your salary achievable. While lawmakers may manage to prevent Social Security cuts, there is also a chance that benefits will be slashed by 20% or more in the future. Since nobody knows which scenario will unfold, saving as much as possible is best to ensure that potential cuts will not wreck your retirement.