Alternative Revenue Ideas That Could Save Social Security
Social Security faces insolvency in six years. Proposals beyond payroll taxes include taxing stocks, estates, and employee benefits.
Social Security's trust funds are projected to be depleted within six years, intensifying pressure on lawmakers to find new revenue streams that go beyond the politically fraught step of raising payroll taxes, according to a MarketWatch analysis.
Among the options drawing renewed attention are taxes on capital gains from stock sales, expanded estate taxes, and levies on employer-provided benefits such as health insurance. Each approach would shift part of the financial burden onto different segments of the population, with higher-income earners and wealthy estates likely absorbing a disproportionate share of any new obligations.
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Proponents of taxing investment income argue that the current system disproportionately relies on wages — income that is already subject to Social Security withholding — while leaving passive and capital income largely untouched. Broadening the tax base in this way could inject significant new revenue without raising rates on working Americans, supporters contend.
Estate tax expansion represents another avenue under discussion. Critics of that approach warn it could complicate succession planning for family businesses and farms, while advocates say it targets accumulated wealth that has long escaped Social Security's reach. Taxing employee benefits, meanwhile, would affect a wide swath of workers who receive compensation in non-wage forms.
No single proposal commands a clear legislative majority, and any combination of fixes would require bipartisan agreement in a divided Congress. The six-year timeline, however, is concentrating minds on both sides of the aisle. Continue reading at MarketWatch.com
