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Americans Would Pay Higher Taxes to Preserve Social Security

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As Republican lawmakers are poised to push including cuts to entitlement programs in the deficit reduction debate, a new poll released Monday shows that the majority of Americans would agree to pay higher taxes in order to preserve Social Security.  

The National Academy of Social Insurance and Mathew Greenwald & Associates collaborated on the multigenerational poll of 2,000 Americans aged 21 or older, which gauged Americans’ perspectives on Social Security and their preferences regarding options to strengthen the program for the future.  

Conducted by Ipsos Loyalty in September, the poll explored working and retired Americans’ attitudes toward Social Security and the importance of Social Security benefits to beneficiaries’ incomes. The study also included a trade-off analysis that enabled researchers to examine how survey respondents weighed the appeal or lack of appeal of various packages of Social Security policy options.

Key findings of the poll showed:

  • Americans don’t mind paying for Social Security because they value it for themselves (80%), for their families (78%), and for the security and stability it provides to millions of retired Americans, disabled individuals, and children and widowed spouses of deceased workers (84%).
  • 84% believe current Social Security benefits do not provide enough income for retirees, and 75% believe we should consider raising future Social Security benefits in order to provide a more secure retirement for working Americans.
  • 82% agree it is critical to preserve Social Security for future generations even if it means increasing Social Security taxes paid by working Americans, and 87% want to preserve Social Security for future generations even if it means increasing taxes paid by wealthier Americans.

The trade-off analysis conducted for the study shows that, rather than maintain the status quo, 71% of Americans would prefer a package of changes that increases Social Security revenues, pays for benefit improvements and eliminates more than 100% of the projected financing gap.

The preferred package would:

  • Gradually, over 10 years, eliminate the cap on earnings that are taxed for Social Security. This would mean that the 5% of workers who earn more than the cap ($110,100 in 2012; $113,700 in 2013) would pay into Social Security throughout the year, as other workers do.
  • Gradually, over 20 years, raise the Social Security tax rate that workers and employers each pay from 6.2% of earnings to 7.2%. A worker earning $50,000 a year would pay about 50 cents a week more each year.
  • Raise Social Security’s basic minimum benefit so that someone who paid into Social Security for 30 years can retire at 62 or later and not be poor.
  •  Increase Social Security’s cost-of-living adjustment (COLA) to more accurately reflect the level of inflation experienced by seniors.

The package is preferred over the status quo by large majorities of seniors in the so-called Silent Generation, born before 1946 (76%); Baby Boomers, born from 1946 to 1964 (71%); and younger Americans in Generation X, born from 1965 to 1979 (73%) and Generation Y, born in 1980 and after (67%).