The Democrat led House Ways & Means Committee will hold a hearing this Thursday on the Social Security 2100 Act. The bill would raise taxes by a staggering $19 trillion, or $2.5 trillion per decade, over the Social Security window.
The proposal currently has 210 Democrat co-sponsors, or 89% of the Party’s membership in the House, signaling Democrats’ near universal shift towards higher taxes. It is also worth noting that the bill is just eight votes shy from majority support, and there are 25 remaining Democrats who could still sign onto the bill.
This bill fails to address the root issues underlying the Social Security crisis. It simply raises taxes on American workers and businesses, threatening economic growth for the entire country.
Tax Hikes in The Social Security 2100 Act
Democrats’ singular solution to fixing Social Security is to raise taxes. The enormous $18.9 trillion cost of this bill would be footed by just about every worker and business across the country. The list of proposed tax hikes in this bill is not a short one, and some of those provisions are listed here:
- Lifting the payroll tax cap so that it applies to over $400,000 in income
- Gradually increasing the payroll tax (both employer and employee side) from 6.2% to 7.4% by 2042.
- Gradually increasing the self-employment tax from 12.4% to 14.8% by 2042, which hurts entrepreneurs and small businesses.
The Social Security 2100 Act Doesn’t Fix Social Security
This bill does nothing to address the structural problems behind Social Security. At its current rate, the Social Security trust fund is set to run out by 2035. At that point, the government could only pay out 80% of benefits, with that rate decreasing over time.The Democrat proposal makes no attempt to deal with root issues of Social Security, like raising the retirement age or using a more accurate measure of inflation. Instead, the bill simply demands that hard working Americans pay more in taxes.
Despite the left’s proclivity to identify tax hikes as the sole, one size fits all solution to every policy challenge, Republicans have been working hard to provide real solutions to the challenges facing Social Security.
For example, back in 2016, Republican Congressman Sam Johnson of Texas sponsored the Social Security Reform Act of 2016. The bill made Social Security fully solvent, gradually increased benefits to lower-income retirees, and reduced taxes. The proposal utilized common sense reforms, like a slightly increased retirement age, and means testing for higher-income retirees.
This thoughtful approach to Social Security reform should remind Democrats of the program’s historical roots. When it was passed in 1935, Social Security set the retirement age at 65, even though the average life expectancy at that time was 61. This is because the program was intended to serve as a supplement to personal retirement savings, instead of the sole income for retirees. That’s why the payroll tax was originally set at just 2%, compared to this bill’s proposed 7.4%. Private savings still outpace social securitypayments for the vast majority of Americans, which is why lawmakers should seek to promote and make easier personal retirement savings by supporting measures like the retirement reform bill proposed by Senator Rob Portman earlier this year.
Democrats’ Across the Board Tax Hikes
The Social Security 2100 Act is one of many Democrat tax hike proposals. Despite the historical economic growth spurred by the Republican Tax Cuts and Jobs Act, Democrats continue to propose hampering virtually every sector of the American economy with tax increases, with some recent examples included here:
- Elizabeth Warren (D-Mass.) calling for a new 7% revenue tax on Corporations, raising taxes by $1 trillion on American businesses.
- Days into the new Congress, the new House Democrat Majority changed the rulesto make it easier to raise taxes on the American people.
- Alexandria Ocasio Cortez (D-NY) has proposed a top income tax rate of 70 percent. Many others have suggested applying this rate to capital gains income.
- House Speaker Nancy Pelosi (D-Calif.) has called for repeal of the entire GOP tax cuts. This would see 90 percent of wage earners face higher taxes, and a family of four earning $73,000 in annual income seeing a tax increase of roughly $2,000 per year.
- Bernie Sanders has proposed over $14 trillion in higher taxes as part of his proposal for a government takeover of the American healthcare system.
- Warren has called for a wealth tax which would force some Americans to hand over 3 percent of their wealth to the government every year.
- Democrats rejected a proposal by Ways and Means Ranking Member Kevin Brady (R-Texas) to extend middle class tax relief. This amendment would have made the $2,000 child tax credit (up from $1,000) and the $24,000 standard deduction for families (up from $12,000) permanent for American families.
- House Majority Whip Jim Clyburn (D-SC) has proposed legislation that would raise the corporate rate in order to restore non-profit deductibility of fringe transportation benefits. While the bill proposes a modest rate hike to 21.03 percent, it would undermine the success of the GOP tax cuts and open the door to additional corporate rate hikes to pay for leftist spending priorities.
- Senator Tammy Baldwin (D-Wis.) and Rep. Bill Pascrell (D-NJ) have proposedincreasing taxes on carried interest capital gains, which would dangerously harm economic growth and investment.
- Senator Brian Schatz (D-HI) and Congressman Peter DeFazio (D-Ore.) have introduced legislation that would institute a financial transactions tax of 0.1 percent on the sale of any stocks, bonds, and derivatives.
The Social Security 2100 Act is very clear in its intent: raise taxes on almost every American worker or business. The bill does nothing to address Social Security’s fundamental cost issues or insolvency.
Its tax hikes would hurt the very people Democrats are claiming to help. The enormous $19 trillion tax bill proposed here would cost the economy greatly, and rob Americans of the ever increasing fruits of their labor. Congress should reject the Social Security 2100 Act, along with all other Democrat tax hike proposals, and instead seek a smarter approach to retirement savings.