Expanding the payroll tax quashes PC.

1. Shore up funding As I mentioned above, the biggest problem facing Social Security right now is that the OASDI trust fund will soon be out of money. When that happens, the Social Security Administration (SSA) only expects to be able to cover 77% of scheduled benefits. The main way the SSA funds Social Security[1] is through payroll taxes. Individuals and employers each must pay a 6.2% Social Security tax on their earned wages. Self-employed individuals must pay a 12.4% Social Security tax. The idea is that you pay into the program while you are younger and working full time and then collect benefits once you retire or are close to retirement. But there is a limit on how much of an individual's earnings can be taxed for Social Security. In 2023, that limit will be $160,200. These payroll taxes, however, haven't been enough to cover scheduled benefits, which is why the OASDI trust fund has been drained. One idea by many Democratic politicians is to increase the amount of an individual's earnings that can be taxed to $250,000 or more. Biden does seem to agree with the idea in general, noting in his plan that he wants high-earning Americans to pay the same taxes on their earnings as middle-class families do. But he hasn't gone as far as some Democratic proposals and has also said that "nobody earning less than $400,000 a year will pay an additional penny in new taxes. Nobody." Former SSA Deputy Commissioner Andrew G. Biggs earlier this year stated in an op-ed that Biden's position could actually lead to a bipartisan solution. However, big tax hikes are usually difficult to push through Congress, so if something like this is going to happen, I suspect it's going to take a lot of political capital.