Social Security taxes are going up if President-elect Joseph Biden gets his way.
Under his plan, the 12.4-percent tax on earnings will apply up to the regular wage base of $142,800 as well as those earning more than $400,000. If you make more than that, you’ll have to start paying again. The new revenues would directly benefit certain people.
First off are low-wage earners. If a person worked 30 or more years in low-paying jobs and received a low Social Security benefit, it would jump to 125 percent of the federal poverty level. If this applied in 2019, the minimum monthly benefit would’ve been $1,301, up from about $886.
Next are widows and widowers. When a spouse dies, the lesser of the Social Security benefits ends. Under the Biden plan, the survivor would receive 75 percent of what was earned as a married couple.
Caregivers would benefit too, receiving earnings credits for taking care of children age 12 or less and family members with disabilities. Every month a caregiver provides care for at least 80 hours earns them credits equal to half the average national monthly wage index, on top of whatever they earned in covered employment.
Americans who’ve received Social Security benefits for 16 years or more will see their benefits increase 1 percent annually up to a 5-percent cap (they’ll also get cost-of-living-increases). This benefit is to help cover the higher costs of health care and transportation faced by many seniors.
Lastly, the Windfall Elimination Provision (WEP) prevents workers in certain circumstances from receiving more than their fair share of benefits. But people who work in non-covered jobs wouldn’t be subject to the WEP, so they can double dip.
The Biden plan will give people more. However, it does nothing to solve Social Security’s long-term solvency problem.
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