Raising the amount of income subject to Social Security taxes would be a bad way to try to shore up the retirement benefits program, a Social Security analyst says.
Mark Warshawsky, a member of the Social Security Advisory Board and a former assistant Treasury secretary for economic policy, delivered the argument against increasing the taxable maximum today during a hearing on Social Security’s finances organized by the House Ways and Means Committee’s Social Security subcommittee.
Warshawsky, who has been a research director at the TIAA-CREF Institute, New York, told lawmakers that he was appearing on his own behalf, rather than as a representative of the Social Security Advisory Board or any other organization.
Increasing the amount of annual earnings subject to Social Security taxes is a frequently mentioned proposal, Warshawsky said.
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Recently, he said, a deficit reduction commission has proposed increasing the “taxable maximum” until the country is taxing 90% of the total earnings of the labor force.
The commission would increase the amount of the taxable base by 2%, and that process could take until about 2049. If the increase were completed with one step in 2012, the taxable maximum would increase to about $215,000, from $106,800 today, Warshawsky said.
“This is a very large tax increase on about 10 million of our most productive workers,” Warshawsky said, according to a written version of his remarks posted by the Ways and Means Committee.