Social Security for the Future: A Fiscally Sound Proposal to Expand Benefits and Add Progressivity to the System's Funding (With Additional Suggestions for Closure of Coverage Gaps)

The following plan restores Social Security to long‐range actuarial balance by providing additional funding while making that funding somewhat progressive, as the benefit structure already is. It also is a response to the upward redistribution of income and wealth over the last few decades, which is projected to continue. The progressivity of the funding mechanism would result from a universal $20,000 exemption applied to first‐dollar earnings, coupled with application of a principle that already has been applied to Medicare funding: taxing the full amount of wages with no cap. Thus, the higher the wages, the closer one would be to paying the current level of 6.2 percent, although no one would actually pay quite that much. This would not undermine the principle of earned benefits, since very few beneficiaries would have average wages below $20,000, and even for those, there still would be a requirement of the requisite number of credits in covered employment.