Senator Bernie Sanders Wants the Wealthy to Pay Their Fair Share to Save Social Security, but There's a Problem -- They Already Are

America's leading retirement program, Social Security, is on a collision course with disaster.

Based on estimates from the latest annually released Social Security Board of Trustees Report, the program is staring down a $25.1 trillion (and growing) funding shortfall over the next 75 years, as well as the prospect of the Old-Age and Survivors Insurance trust fund (OASI) exhausting its asset reserves by 2033. This is the fund that doles out monthly benefits to more than 53 million retired workers and approximately 5.8 million survivors of deceased workers.

To quickly clear up any confusion, Social Security isn't at any risk of going bankrupt, becoming insolvent, or halting payments. If you qualify for a traditional benefit, you'll still be receiving a monthly payout. But the existing payout schedule, including near-annual cost-of-living adjustments (COLAs), is very much at risk beyond 2033.

Image source: Getty Images.

Solutions are needed to strengthen Social Security -- and Sen. Bernie Sanders (I–VT) believes he has the answer. Unfortunately, the long-serving senator's "fix" isn't as surefire as he thinks.

Here's what really ails Social Security

Before there can be any deep discussion about how Social Security can be strengthened, there first needs to be an understanding of why its foundation has been crumbling over the last four decades.

What can be said with a high degree of certainty is that Congress didn't steal from Social Security's cookie jar, and undocumented migrants aren't receiving traditional benefits. These are two common scapegoats found on online message boards lacking factual evidence to back them up.

Rather, ongoing demographic shifts are responsible for much of what ails Social Security. In no particular order:

• Baby boomers are retiring from the workforce, which is pressuring the worker-to-beneficiary ratio.
• People are living substantially longer now than they were when the first Social Security retired-worker benefit was mailed in January 1940. The program was never designed to dole out benefits to retirees for multiple decades.
• The U.S. birth rate hit an all-time low in 2024, which is a recipe to weigh down the worker-to-beneficiary ratio even more in the decades to come.
• Net legal migration into the U.S. has slowed considerably since the late 1990s. Social Security counts on a steady influx of younger legal migrants to generate payroll tax income for the decades they're in the labor force.
• More earned income has been escaping the 12.4% payroll tax since the mid-1980s. Wages and salary (but not investing income) above $176,100 in 2025 are exempt from the payroll tax.

Bernie Sanders wants to tax the wealthy to fix Social Security, but his plan has a major flaw

With a clearer understanding of how America's leading retirement program got into this mess, let's take a closer look at Sen. Sanders' plan to fix things:

For 90 years, Social Security has paid out every benefit owed to every eligible American. Now Trump is working overtime to dismantle it.

We won't let them privatize Social Security.

Instead, we must expand benefits and its solvency by making the wealthy pay their fair share. pic.twitter.com/LbVui2ZDGC

-- Sen. Bernie Sanders (@SenSanders) August 14, 2025

In the post you see above to Sen. Sanders' social media account on X, he laid out a plan to tax the wealthy and make them pay their fair share. Said Sanders:

We've got to expand Social Security benefits and extend the solvency of Social Security for the next 75 years. And the way to do that, as most of you know, is to simply lift the cap on taxable income so that the wealthiest people in our country start paying their fair share of taxes.

Right now, a billionaire, some guy who's making zillions of dollars every year, pays the same amount into Social Security as someone who makes $176,000 a year. If we end that absurdity, we could expand Social Security benefits by $2,400 a year, lift millions of seniors out of poverty, and make sure that Social Security is solvent for generations to come.

While taxing the wealthy to strengthen Social Security is a popular proposal, it has two glaring flaws that are on full display in Sen. Sanders' post.

First is the unpleasant truth that high earners are already paying their fair share into America's top retirement program.

The reason the taxable earnings cap exists at $176,100 -- this figure rises in years where a positive COLA is passed along to beneficiaries -- is because there's a maximum monthly payout ceiling at full retirement age of $4,018 in 2025. Although billionaires may not need a dime from Social Security to be financially sound during retirement, their monthly benefit is capped, just as their payroll tax liability is capped. Long story short, the wealthy are paying their fair share.

The second issue with Sanders' analysis is that completely lifting the taxable earnings cap doesn't resolve Social Security's long-term funding shortfall.

According to the Social Security Administration's Office of the Chief Actuary, if all earnings were subject to the 12.4% payroll tax, it would extend the solvency of the trust funds (the OASI and Disability Insurance trust fund) by "about 35 years."

Though an extra 35 years would afford Congress more time to come up with solutions to strengthen Social Security, it wouldn't allow for any expansion of benefits (beyond near-annual COLAs), and it doesn't make the OASI plus Disability Insurance trust funds collectively solvent for the next 75 years.

Image source: Getty Images.

Strengthening Social Security will require tough and unpopular decisions

Let me clarify that I'm not suggesting Sen. Sanders' proposal to lift, or at the very least increase or reinstate, the payroll tax on high earners is a bad idea. Rather, it's that his justification for doing so -- making the wealthy pay their fair share -- is wrong. It's not about making the wealthy pay their fair share (which they're already doing). It's about providing for aging and/or disabled workers who can no longer provide for themselves.

Strengthening Social Security's foundation for the next 75 years is going to require some tough and potentially unpopular choices that could cost our elected officials votes. But it's the price that will need to be paid if sweeping benefit cuts of up to 23% are to be avoided for the OASI come 2033.

For example, lifting the cap to tax all earned income would provide an immediate income boost to Social Security and, in all likelihood, kick the can on the OASI's asset reserve depletion date down the road by years, if not a few decades. In such a scenario, high earners would be paying more than their fair share into the program, but would be doing so to support retired workers, workers with disabilities, and survivor beneficiaries who can no longer provide for themselves.

Since 94% of workers earn less than $176,100, raising or lifting the taxable earnings cap will only affect around 6% of workers, at most. It's easy to see why this proposal has so much support.

But this popular proposal alone doesn't get Social Security to the finish line.

When Social Security's trust funds were running on fumes in 1983, a bipartisan Congress passed, and then-President Ronald Reagan signed, the Social Security Amendments of 1983 into law. Among these sweeping reforms was a gradual increase to the payroll tax rate on all working Americans. This may need to happen again to keep OASI benefits from being slashed.

Lawmakers may also need to consider an increase to the full retirement age, which was gradually increased as part of the Amendments of 1983. Raising the full retirement age would require future generations of workers to either wait longer to receive 100% of their monthly benefit, or to accept a steeper reduction in their monthly payout if claiming early. Regardless of their decision, it would reduce lifetime outlays to future retirees.

Only doing what's popular simply won't fix what ails Social Security.

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