FOCUS: Feels the country needs to change Social Security

By Alvin Johnson

SANDY SPRINGS, Ga  |  In an earlier issue of the GwinnettForum, I mentioned the Biden administration was considering making changes in the Social Security program and I offered up recommendations for their consideration. 

Johnson

The recommendations were: 

1. Reduce the FICA tax from 12.4%  (6.2% individual) to 10%;
2. Remove the cap on taxable income entirely. (Presently, the cap is $147, 000);
3. Increase the death benefit to three times the deceased recipient’s monthly benefit. (Presently it’s a flat $255); and 
4. Revise the tax code so that Social Security benefits are tax-exempt.

The Biden administration has now released its recommendations. They are: 

1. Implement a new methodology to measure inflation. They report that since 2000, Social Security benefits have lost 40% of their purchasing power; 
2. Have the FICA tax apply to individuals earning over $400, 000 a year. Individuals earning between $147,000 and $400,000 would still have their taxable income capped;
3. Increase benefits for those recipients aged 80 and older by about 5%;  and 
4. Increase the minimum benefit amount from $951 per month to $1,341 per month.

Also, last month U.S. Rep. Angie Craig of Minnesota introduced a piece of legislation called the “You Earned It, You Keep It Act,” which would repeal all federal taxes on Social Security benefits.

Craig stated: “This change would be fully paid for by raising the cap for individuals earning more than $250,000 and asking them to continue paying into Social Security each year.” Craig maintains this legislation would also improve the long-term solvency of Social Security.

I fully support some kind of Social Security reform, particularly in light of the calls we hear to reduce Social Security benefits. The fact is 21% of the married couples on Social Security rely on it for over 90% of their income. 

At a very minimum, the tax rate should be reduced, the earnings cap removed, the death benefit increased, and all Social Security benefits should be tax exempt.

The time is long overdue for these changes.

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