New Article: Manoj Viswanathan, Making Social Security Progressive, forthcoming Colum. L. Rev. Forum. (SSRN Sept 2023). Abstract below:
Social Security is funded by a regressive tax wherein wages below the wage cap ($160,200 in 2023) are taxed at a flat rate but wages above the cap are taxed at zero. To address this normative shortcoming and make Social Security progressive, this Essay proposes eliminating the wage cap and using the additional revenue to fund a zero-rate Social Security tax bracket analogous to the standard deduction of the federal income tax.
Using IRS data, I find that these changes could fund an exemption of at least $10,000, thereby saving low-wage taxpayers approximately $1,200. By only altering the distribution of the tax burden but not total revenue collected or Social Security benefits, this change would also be straightforward to implement.
These changes would be especially valuable for the millions of impoverished low-wage earners for whom the additional funds would provide much-needed support, and for certain racial groups whose decreased life expectancy reduces their total Social Security benefits.
Poverty Law 