Republican senators rarely endorse raising taxes, especially from under the lights of a debate stage. But Senator Roger Marshall, the Kansas incumbent seeking re-election, said he supported the idea to strengthen Social Security.
“I would eliminate the cap altogether,” Mr. Marshall said in a debate last Wednesday, referring to the $184,500 income ceiling on payroll taxes, the dedicated tax that finances the social insurance program. That means higher earners would be subject to taxes on a larger share of their income. His Democratic opponent, Adam Hamilton, supported raising the cap — though he wasn’t yet sure by how much.
With the midterms approaching, more major-party candidates have begun sharing their positions on shoring up Social Security, both in live debates, political ads and campaign websites. The senators up for election now will be in office when Social Security’s retirement trust fund is expected to run dry in late 2032. If that happens, the more than 60 million people receiving Social Security retirement, spousal and survivor benefits would see that income cut by at least 22 percent, unless Congress comes up with a plan.
Many Senate candidates in battleground states have clung to expected party lines and broad pledges to protect the program. But a growing number of Republican candidates, including Mr. Marshall, have said they’re open to the idea of subjecting more earned income to Social Security taxes. They join sitting Republican lawmakers including Senator Bernie Moreno of Ohio and Representatives Tom Cole of Oklahoma and Lloyd Smucker of Pennsylvania.
It’s a testament to the problem lawmakers are facing: For more than 90 years, the popular program has been a reliable and stabilizing force, keeping millions of seniors out of poverty and providing a backstop for retirees. It’s also long been called the third rail of politics — touching it can be political dynamite.
Lawmakers generally have two major levers to strengthen the program: cutting benefits, raising taxes or some combination of the two.
Social Security is financed through workers’ payroll taxes, a dedicated tax of 6.2 percent of earnings paid by both employees and employers (for a total of 12.4 percent). It’s applied to the first $184,500 of earnings in 2026 — that’s known as the taxable maximum, which rises with average wages.
Anything above that amount isn’t taxed, which means more affluent people — as well as those who derive income from sources other than earnings — owe payroll taxes on a smaller percentage of their income than those below the ceiling. With income inequality growing, top earners have seen their incomes rise far faster than those of more average workers, accelerating this trend.
Perhaps not surprisingly, many Americans support raising or eliminating the cap on payroll taxes, polling has found.
Where do midterm candidates stand?
In a recent analysis of 41 Senate candidates in competitive races (there are 35 races total), 20 candidates have endorsed raising or eliminating the cap, according to Jon Schwabish, an economist who focuses on retirement and tax policy issues and the founder of PolicyViz, a data analysis firm.
That includes all four independents and three Republicans: Besides Mr. Marshall, Republican supporters include Senator Susan Collins, the incumbent in Maine, and Senator John Deaton in Massachusetts. Most other Republicans haven’t taken a position, the report found. Thirteen of 17 Democrats also support raising the cap.
Though most Senate candidates reviewed for the analysis align with their party’s general stance, there are outliers, the report said. In Kansas, Maine and Massachusetts, for example, both major-party candidates support raising the payroll cap. “It may matter more where the candidates disagree and the race is close,” Mr. Schwabish said.
That’s the situation in at least three Senate races: Iowa, Nebraska and Ohio. In Nebraska, the independent Dan Osborn, who favors eliminating the cap, is in a tight race with Republican Senator Pete Ricketts, the report found. In Iowa, the Republican candidate, Ashley Hinson, who hasn’t taken a position, is slightly behind the Democrat Josh Turek, who favors raising the tax ceiling. In Ohio, the Democrat Sherrod Brown, who also favors increasing the cap, leads the Republican incumbent, Senator Jon Husted, by several points; he’s the only candidate on record who opposes it, the analysis found.
Lifting the payroll cap cannot fix the financing gap on its own. Lawmakers would need to make additional tweaks to close the financing shortfall over the program’s 75-year planning horizon.
Eliminating the payroll cap altogether — without providing any corresponding rise in benefits to individuals paying more in taxes — would close about 58 percent of the financing gap over the next 75 years, according to Social Security’s projections, though other estimates vary. (Providing higher benefits to people who pay more in tax wouldn’t go quite as far in narrowing the gap.)
On the tax side, lawmakers can raise the payroll tax rate. But that would affect everyone, including lower-income earners.
“The debate is easier to follow once you see that ‘raising Social Security taxes’ can mean very different things for very different workers,” Mr. Schwabish said. “At the end of the day, the choice between the two levers is a choice about who pays.”
In campaign ads, it’s not always clear which Social Security taxes the sponsors are referring to. Besides the payroll tax cap ($184,500) and tax rate (6.2 percent for workers), Social Security benefits may also be subject to taxes if your income exceeds certain thresholds, for example.
Many Republicans, including President Trump, have campaigned on cutting taxes on tips, overtime and Social Security — and many recent political ads suggest that Congress’ big tax and policy bill passed last summer cut Social Security taxes.
That’s not exactly what happened. Instead, the legislation created an extra tax break for people 65 and older below a certain income ceiling, which reduces taxes owed on their overall income, including Social Security income. That change, along with others in the new law, weakened Social Security’s finances because the taxation of Social Security benefits adds revenue to the program’s trust funds.
The taxation of benefits began in 1983, in an effort to stabilize Social Security’s finances, and is the type of measure that some policymakers say is needed again now.
Raising taxes is not the only way to bolster the program: benefit reductions, slowing the cost-of-living adjustments, raising the retirement age or collecting other taxes are other options, some of which were also mentioned in recent political ads, debates or on candidates’ websites.
Mr. Deaton, the Massachusetts Republican, has endorsed gradually raising the retirement age only for younger and future workers, according to his website.
But back on the Kansas debate stage, neither Mr. Marshall and Mr. Hamilton would commit to that idea. In practice, it’s a benefit cut — people would need to wait longer to receive their standard benefit amount. It’s often viewed as a controversial fix because many workers in physically taxing jobs or those with health issues don’t have the luxury of waiting.
Raising the retirement age also doesn’t provide an immediate financial boost to the program because it must be phased in gradually (so that people close to retirement aren’t negatively affected).
“As far as adjusting the age, I think there’s a lot of other things we can try to exhaust first on that side,” Mr. Marshall said.
The post From Senate Candidates, Surprising Stances on Fixing Social Security appeared first on New York Times.
