How to Help Social Security Stay Solvent

But raising the payroll tax rate on existing workers is near-impossible politically. An easier solution would be to eliminate the earnings cap while leaving benefits as is. The extra revenue would solve the financial gap for 35 years, according to a report by the Congressional Research Service.

About 180 million Americans contributed a total of $943 billion to Social Security in 2021. Ending the cap for the 5% of U.S. workers who earn more than $160,200 would increase revenue by more than $150 billion.

Representative John Larson, a Connecticut Democrat, has offered a comprehensive plan to save Social Security that would raise the earnings cap but still provide some relief to workers earning below $450,000.

For those concerned that making any changes to Social Security is too difficult, remember, it’s been done before. In 1994, a bipartisan group of lawmakers eliminated the income cap that used to exist for taxes paid by workers to fund Medicare.

Almost everyone agrees that Social Security is vital. Nearly two-thirds of beneficiaries age 65 and older receive 50% or more of their total income from monthly Social Security checks. For one-third of elderly beneficiaries, Social Security provides 90% or more of their income.

Studies show the majority of Americans want more revenue for Social Security. The quickest way to get it might just be to ask at least those 500-some-odd well-compensated executives to pay more.

Teresa Ghilarducci is the Schwartz Professor of Economics at the New School for Social Research. She’s the co-author of “Rescuing Retirement” and a member of the board of directors of the Economic Policy Institute.