WASHINGTON – Congressional Democrats introduced a bill that would increase the investment gains tax by 6.2 percent for households with adjusted gross income of $250,000 and above to pay for an expansion of Social Security.
Sen. Bernie Sanders (I-Vt.), sponsor of the Social Security Expansion Act in the Senate, said the proposed “net investment income tax” increase from 3.8 percent to 10 percent would make “millionaires and billionaires” pay more in taxes to expand Social Security and extend the life of the program. The investment gains tax originally became law as part of Obamacare.
“Everybody in this room knows that Social Security hasn’t added a nickel to the debt. It’s tax breaks for billionaires and the war in Iraq and an inflated military budget that in fact led to the high deficits and the national debt,” Sanders said during a press conference on Capitol Hill last week with the organization Social Security Works.
“Starting at $250,000 and going up, the top one and a half percent will be paying more in taxes, and at a time of massive income inequality that is appropriate. And what will we do with that additional revenue? We are going to extend the life of Social Security for 61 years. How’s that? And we’re going to expand benefits, not cut them,” he added.
Sanders said seniors earning less than $16,000 per year would see their Social Security benefits go up by about $1,300 each year with the bill in effect.
“We can expand benefits. We can extend the life of Social Security if we have the guts to tell the millionaires and the billionaires yes they are going to have to pay a bit more in taxes,” he said.
In addition to Sanders, Sen. Elizabeth Warren (D-Mass.), Rep. Peter DeFazio (D-Ore.) and other members were on hand to announce the legislation.
Warren criticized President Trump for nominating Rep. Mick Mulvaney (R-S.C.) as director of the Office of Management of Budget.
“Donald Trump has already turned his back on his promise to protect Social Security. He has turned his back on millions of seniors. What’s he doing? He has put Congressman Mulvaney in charge of the Office of Management and Budget. This is a man who says we just need to raise the retirement age to 70 – talk about a man who has never done any heavy lifting for work, right?” Warren said at the news conference. “He says it’s perfectly reasonable to cut Social Security.”
If passed and signed into law by Trump, the legislation would apply the payroll tax to income above $250,000 and raise the Social Security tax on investment income from 3.8 percent to 10 percent.
According to the text of the bill, 62 percent of the investment income tax revenue would be distributed to the Federal Old-Age and Survivors Insurance Trust Fund and 9 percent would be applied to the Federal Disability Insurance Trust Fund.
The new revenue collected would help pay for increasing the “primary insurance amount” for qualified beneficiaries starting in 2021 and “revise computation of cost-of-living adjustments to use the Consumer Price Index for Elderly Consumers.”
Sanders said Trump should support their bill since he pledged not to cut Social Security during the presidential campaign.
“I think Trump was as clear as he could be and if he goes back on these words, he is lying to the American people,” Sanders said after reading past quotes from Trump about protecting Social Security.