Social Security tax increase could cost workers $3,000 a year: What other options could prevent 22% benefit cuts?
Social Security tax increases could cost workers up to $3,000 a year as lawmakers consider payroll taxes, retirement age and COLA changes.
The Social Security trust fund is predicted to run out of money by the end of 2032, causing an immediate 22% reduction in benefits for retirees and recipients. To avoid this, one option being considered is to raise the payroll tax paid by workers and employers. Currently, the tax rate is 12.4%, split equally between the employee and employer.
If the tax were increased to 16.65% to close the funding gap, workers could face an additional $2,617 to $3,024 in taxes annually, or about $218 to $252 per month. This cost could be shared between workers and employers, but self-employed individuals would bear the full burden. Additionally, raising the current $184,500 earnings cap on Social Security taxes or gradually increasing the full retirement age could also help fund the program.
However, these measures would either increase taxes for higher earners or reduce benefits for those who wait longer to claim their full retirement benefits.
Written by urgent.news from Hindustan Times - World News's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
