Lawmakers Are Targeting Social Security 'High Earners,' Here’s Why That May Be a Bad Idea

There are potential risks of targeting wealthy earners and leaving other issues by the wayside.

Published: 7/8/2026, 9:41:17 AM EDT

Lawmakers Are Targeting Social Security 'High Earners,' Here’s Why That May Be a Bad Idea — Money saving for the family. (William Potter/Shutterstock)

Congress seems ready to move on the Social Security front, and it’s about time, given that the system’s funding bucket is emptying fast.

According to federal government data, the Social Security Administration’s OASI trust fund will run out of funds by the fourth quarter of 2032, a timeline that would trigger a 78 percent cut in program benefits unless the U.S. Congress intervenes. A separate study from the Committee for a Responsible Budget pegs the potential. The Social Security cut is about $500 on average for recipients in 2032 to keep funding stable.

Now, Washington, D.C., politicians have released potential strategies to keep the Social Security cash pipeline flowing. Take Sens. Elizabeth Warren (D-Mass.) and Bernie Moreno (R-Ohio), who are co-sponsoring a bill that would hike the system’s payroll tax cap.

The duo points out that for 2026, the payroll tax cap, or taxable maximum, is $184,500. “Workers and their employers each pay 6.2 percent on wages up to that amount (self-employed individuals pay 12.4 percent),” Warren said in a statement. “Today, the most that would be paid into Social Security for one worker is $22,878, or 12.4 percent of $184,500.”

While the Warren-Moreno plan doesn’t specify a new, higher Social Security tax cap, Warren's statement noted that canceling the payroll tax cap would inject around $3 trillion into the program over the next decade. “Lifting the cap so that all income is treated the same would generate substantial revenue that would extend the solvency of Social Security for another generation,” Warren stated.

Warran and Moreno aren’t alone. In late June, Sen. Bernie Sanders (I-Vt.), speaking at a U.S. Senate subcommittee meeting on Social Security solvency, said it’s high time Congress asks “the wealthiest people in this country, who have never had it so good, to start paying their fair share of taxes.”

Here's How New Social Security Fixes Would Impact Recipients

Lawmakers keep circling back to the taxable maximum because the math is right there in plain sight. In 2026, only the first $184,500 of wages is subject to the OASDI payroll tax. “Anything above that cap is not taxed for Social Security purposes,” Scott Jones, financial adviser with Genesis Wealth Advisor Group in Marlton, New Jersey, told NTD News. “Since 1983, wages at the top have grown faster than the cap, so the share of covered earnings actually taxed has drifted from about 90 percent down to roughly 83 percent today.”

The scoring is meaningful, Jones noted. “Per SSA’s Office of the Chief Actuary, raising the cap to cover 90 percent of earnings closes roughly 28 percent of the 75-year gap,” he said. “Eliminating the cap entirely with full benefit credit closes closer to 48 percent, according to SSA Provisions Affecting Payroll.

Yet even that move would not work as a standalone fix. “It moves the needle but does not close the gap, and it opens real design questions on benefit credit, pass-through business owners, and long-term wage-growth assumptions,” Jones said.

A five-pronged Social Security funding solution

Spreading the pain may be the most realistic effort to save Social Security. Jones advocates a five-part plan to solve the Social Security solvency crisis. He breaks it down like this:

First, raise the taxable maximum toward the 90 percent coverage level it historically held, phased over about a decade. Jones said Congress should be “open to going further if paired with a modest benefit credit structure.”

Second, phase in the full retirement age toward 70 for younger workers, on a cadence similar to that of the 1983 Greenspan Commission. “This doesn’t include current retirees or near-retirees, only cohorts with enough runway to plan for it,” Jones added.

Third, honor the trust fund’s holdings. The $2.56 trillion in special-issue Treasuries the trust fund holds represents money the general fund borrowed from Social Security over decades. “A phased general fund transfer that meaningfully repays that obligation isn’t new spending, it’s the government paying what it already owes,” Jones noted that voters talk about this all the time and Washington doesn’t. “That gap in the conversation is telling,” he added.

Fourth, a modest phased payroll rate step-up, roughly 0.1 percentage points per year for 10 to 15 years, split between employer and employee. “This is small enough per year to be almost invisible in a paycheck, meaningful in aggregate,” Jones said.

Fifth, and this is the piece missing from most reform proposals, Jones said he’s seen. Build in a statutory decadal review with actuarial triggers, a pre-defined menu of adjustment levers, and near-retiree grandfathering. “Social Security should be maintained the way a well-run pension is maintained, reviewed on a schedule, adjusted in small doses, never allowed to drift for 40 years again,” he noted. “Reform without a scheduled recalibration mechanism is just deferred procrastination.”

Combined, the first four levers close roughly 75-80 percent of the 75-year gap after accounting for how the provisions interact. “Layer in the general fund repayment and the fifth-lever review mechanism, and the framework fully closes the 75-year window while giving the country a real tool to keep it closed,” Jones said.

Leverage taxes to fund Social Security

The non-profit sector has some ideas on how to mend Social Security, too, and they involve wealth and tax breaks.

“Social security needs to be a charity with donors getting preferred benefits from donations that are 120 percent deductible to encourage very rich people to give most of their excess income generously to live tax-free on a fraction,” David Munson, president at Get Real Alliance, a Dallas, Texas-based environmental sustainability organization, told NTD News.

Munson said it’s also time to halt Social Security payments to wealthy people. “Social security taxation is totally regressive as it hits first dollars with 15.3 percent total tax cost, with half hidden from the earner as employer contribution,” he said.

Munson also noted former President Ronald Reagan increased Social Security taxes sharply to funnel its then “excessive” trust fund money into the federal government, where the program’s $9 trillion balance has long ago been spent.

“It was a politically popular way to have a flat tax paying a lot of the federal budget,” Munson said. “Now the chickens have come home to roost with social security tax receipts getting insufficient to pay current benefits, and politicians hate to have the federal government have to start paying back to the trust fund.”

There Are Potential Downsides To a High Earner-Only Approach

There are potential risks of targeting wealthy earners and leaving other issues by the wayside. To Jones, these three downsides come to mind.

First, single-lever fixes create political inertia

If Washington passes a taxable max change and calls it done, the pressure to address the remaining gap disappears, and the demographic problem keeps compounding. We’ve seen this movie before. “The 1983 Greenspan Commission was treated as a permanent fix,” Jones said. “It wasn’t, and 40 years of drift is a large part of why we are where we are today.”

Second, the design of the benefit credit matters more than most people realize

Full benefit credit for taxed earnings preserves the program's earned-benefit character but closes less of the gap. “No benefit credit closes more of the gap but functionally turns a portion of Social Security into a means-tested transfer, which is a philosophical shift the program has never formally made,” Jones noted.

Third, there’s a hefty impact on small businesses

Many pass-through business owners already pay the full 12.4 percent as self-employed tax on earnings up to the cap. “Raising it materially without a phase-in creates cash flow issues for the small business owners who are also the largest job creators in the country,” Jones added. “Any credible version needs a phased schedule, which the current OACT-scored proposals do include.”

The views and opinions expressed are those of the interviewees. They are meant for general informational purposes only and should not be construed or interpreted as a recommendation or solicitation. NTD does not provide investment, tax, legal, financial planning, estate planning, or any other personal finance advice. NTD holds no liability for the accuracy or timeliness of the information provided.