Why should you pay attention to the latest debate over Social Security benefits and FICA taxes? Press the play button to hear about the various reasons.
At least five of the seven Republican Senatorial candidates ran on a promise to cut Social Security, Medicare, and/or prescription drug reforms that lower drug costs for seniors. The Republican Study Committee released a proposed budget that would raise the age to receive full Social Security benefits to age 70, with the age going up based on changes to life expectancy thereafter. Medicare benefits would, under the plan, become a means-tested voucher program.
On the other side of the political divide, several prominent Democrats, including Senators Bernie Sanders and Elizabeth Warren, have proposed that the government shore up the Social Security program by eliminating the wage cap on FICA taxes. That means that instead of applying a 15.3% tax on wage earnings up to $160,000, the tax would be applied to all wage earnings. The argument there is it’s unfair that a handful of executives effectively pay their entire year’s FICA taxes in the first hour of their first workday in the new year, essentially paying hundredths of a percent of their income into the system, while most people are paying 15.3% of their income.
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