Social Security Tax Hikes: What are Americans Willing to Pay For?

November 3, 2014 | By: TaxCure Staff

social-security-benefitsThere’s a lot of debate going on right now with regard to taxes. We often think of Americans as not willing to accept higher taxes, but there are some cases in which Americans — even conservatives — are willing to accept higher taxes in some cases. One of those cases is in the area of Social Security.

According to a recent survey conducted by the National Academy of Social Insurance, most Americans are willing to pay more in order to fix Social Security and improve benefits. Many politicians have been suggesting cuts to Social Security in order to make the program more solvent for a longer period of time, but it appears that Americans would rather see higher taxes than deal with the cuts.

Getting Rid of the Cap on Social Security Taxes

Raising taxes in order to finance benefits for Social Security isn’t something that’s focused on income tax, either. According to the survey, most Americans would prefer to see the cap eliminated on Social Security taxes.

Currently, workers pay Social Security taxes on the first $117,700 they earn in 2014 (in 2015, the cap goes higher, to pay taxes on the first $118,500 of income). After that level, the income is no longer taxed. Most Americans are in favor of gradually eliminating the cap so that all workers pay Social Security tax on all of their income. The understanding is that workers that pay on a higher income would also receive benefits increases.
Not only that, but the survey indicates that most Americans are in favor of raising their portion of the Social Security tax from 6.2 percent of earnings to 7.2 percent of earnings over time. This amount would, of course, be matched by employers. This amounts to an increase of 50 cents each week for a worker making $50,000 a year.

If these changes would result in full benefits for generations to come, rather than a cut in benefits, most Americans — including Republicans, who are notorious for their opposition to tax increases — would be in favor of them. Indeed, 71 percent of Republicans, according to the survey, say they could pay more in Social Security taxes.

Paying for Priorities

One of the reasons that there is so much wrangling over tax policy is due to the fact that different people have different priorities. Everyone wants their tax dollars to pay for different things. There are people who are opposed to tax dollars going to pay for food for needy children, and there are people who don’t like to see their tax dollars going toward wars. There’s a lot of discussion surrounding what taxes should be used for.

However, this is something that people seem to agree on, even if politicians can’t seem to see eye to eye. It looks as though most people want to make sure that Social Security is available for years to come, and they are willing to pay a little more in taxes now to shore up the future.