It’s no wonder that politicians have had a lot to say about Social Security, which is one of the most popular and essential programs in American history. One of them is Rep. Alexandria Ocasio-Cortez (D-NY). She recently stated that she believes it is critical to make some significant adjustments to Social Security for it to deliver the promise it symbolizes.
Ocasio-Cortez, or AOC as she is more often known, is a powerful progressive voice who has played a key role in shaping the policies of the Democratic majority in Congress. Many believe the progressive wing is dominant and will play an even bigger role in directing future legislation, thus her views are worth listening to.
What AOC had to say about Social Security is below.
When Democrats launched the Social Security 2100 Act in October 2021, Ocasio-Cortez spoke about it. The bill would make significant reforms to the entitlement program, including raising benefits, providing greater raises, making disability benefits more accessible, and raising taxes on the wealthiest Americans to help fund the program.
AOC stated her support for the bill, including modifying the way it is paid by asking more of the wealthiest people to contribute. “What we want to do is improve Social Security, expand it, and cover people like my mother, who quit her job to care for my father when he got sick,” she explained. “And we plan to do it by requiring the wealthy to contribute to Social Security in the same way that I did as a server. It’s quite straightforward.”
The finance adjustment she’s alluding to would be a significant departure from present practices. It’s a chance that many on the left are in favor of.
This is how AOC proposes to reform Social Security.
Workers with income up to a yearly “wage base limit” pay Social Security taxes on all of their earnings under the current system. In 2022, the pay base cap will be $147,000. People who make more than this amount, however, are exempt from paying Social Security taxes on any further earnings. As a result, unlike lower incomes, they are only taxed on a portion of their annual wages.
When calculating benefits, such high earners no longer get credit for wages over the $147,000 cap. Benefits are calculated based on the average wage earned throughout each retiree’s 35 most productive years. Any income beyond the annual wage base limit, on the other hand, is excluded from the calculation. As a result, higher-income Americans receive benefits that replace a smaller percentage of their pre-retirement income than lower-income Americans. The program was created in this way to prevent wealthy people from receiving tens of thousands of dollars in monthly checks.
AOC and other Democrats want to modify the laws of taxation, but not at the expense of benefit increases. Wages up to the wage base level would be taxed in full under President Joe Biden’s plan, just like they are now. Earnings between the wage base limit and $400,000 would be tax-free, but earnings over that threshold would be subject to Social Security taxes. However, individuals who are liable to higher taxes will not see an increase in their benefits.
This initiative has a lot of support, and AOC is one of the many Democrats who have endorsed it. While legislation enacting such a shift is unlikely to pass in the current Congress, which has a razor-thin Democratic majority, a future Congress with more progressive Democrats might very well do so. If it does, it will be because of the efforts of prominent young voices like AOC.
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