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Subscribe to RSSMost Americans think it’s important to preserve adequate Social Security benefits for younger generations — and they may even be willing to pay more taxes to get that assurance, a new survey finds.
The survey, released Thursday by the nonprofit National Academy of Social Insurance, found that about eight in 10 Americans think it is critical to support Social Security even if it means that working Americans have to pay more in taxes. A slightly higher percentage of the 2,000 people surveyed said they think it’s critical to save Social Security even if wealthy people have to pay more.
But here’s the thing: Many Americans also want something in return.
The study found broad-based support among both younger and older Americans for a plan that would gradually increase the amount of payroll taxes everyone pays and also eliminate the cap on the amount of income that can be taxed for Social Security. In return, that plan would call for raising minimum benefits and increasing cost-of-living-adjustments.
The survey comes as many Americans are growing more worried about whether they will see any Social Security benefits at all. Under current government estimates, Social Security could face funding shortfalls in about two decades because the U.S. population is aging and generally living longer.
Experts say it’s not too surprising to find that older people are heavily in favor of retaining Social Security benefits even if it means paying more taxes, but it’s a little more surprising to find that younger Americans also seem to support it generally.
Still, after five difficult years in which many people have struggled financially, many workers may see the allure of a plan that would give them some financial certainty late in life.
“Social Security wasn’t designed to be a sole major source of retirement income, but for many people who haven’t saved enough … it certainly looks attractive,” said Alan Auerbach, director of the Robert D. Burch Center for Tax Policy and Public Finance at UC Berkeley.
Jasmine Tucker, income security research associate with the National Academy of Social Insurance, said she thinks the results show that people are willing to pay extra taxes for Social Security because they know that they will see a return on that investment later in life.
“People seem to be very resistant to raising any taxes, but I think Social Security is different,” she said.
Other studies have found support for raising taxes more narrowly on wealthy Americans to help fund Social Security. A Pew Research Center survey released in December found that 66 percent of Americans would support raising payroll taxes on high-income earners, while 55 percent would support reducing benefits for high-income seniors.
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Still, Auerbach – who was not involved in the study – noted that it’s one thing for people to say they would be willing to pay more taxes to help fund Social Security, and quite another for them to actually commit to a plan that would effectively shrink their current paycheck.
“Do people really know what this would mean in terms of their take-home pay? Have they really thought through what the implications are?” Auerbach asked.
Many Americans are seeing that real-world effect right now, because the end to the payroll tax holiday has resulted in an effective tax hike equal to about 2 percent of their wages. This survey was conducted in September, before the payroll tax holiday ended.
Critics also argue that it may not be feasible to fix Social Security’s funding woes just by raising taxes. Many other plans have called for a mix of raising taxes and reducing benefits either by curtailing cost-of-living adjustments or increasing the age at which people can get full benefits.
“There’s no attractive way to do this. There’s just a variety of less attractive ways,” said Andrew Biggs, resident scholar with the conservative-leaning American Enterprise Institute.
Biggs also argued that despite what the findings show, it would be difficult for politicians to garner support for a plan that involved raising taxes on all Americans.
“If this stuff was so popular, somebody would have proposed it by now,” he said.
It is clear that Americans are anxious for Congress and President Barack Obama to find some way to overhaul Social Security and other programs designed to help older Americans.
A Gallup poll released just days after the 2012 presidential election found that nearly nine in 10 Americans thought it was important for Obama to take major steps to ensure the long-term stability of Social Security and Medicare.
Related: Yes, we can fix Social Security (but it won't be pretty)
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The rate increased more than once in my lifetime. The last time the rate increased was under the presidency of George Bush 41. It is time to raise it again. I been saying this all along.
I would not increase the earning cap because the monthly checks are capped at just over $2500 last I read about it. If you want to increase the amount of earnings that will be taxable, you will have to increase the cap on monthly checks accordingly!
American's are the most gullible people on the planet.
Shhh. Don't let the Republicans know. They'd like to convince us that SS is a big, evil government program that Americans should hate.
SS is insurance, and like your life or car insurance, is only as good as the balance sheet of your insurer. If your insurance company is deep in debt and can no longer borrow money, your insurance is worthless.
I think the payroll tax is too regressive and raising it, even a little makes it more so. We need to find a different way to fund our social insurance programs that is more transparent and less regressive. Taxing consumption, via a VAT is less regressive than the payroll tax, I would support eliminating the payroll tax in favor of that.
Further, the government simply has to stop spending SS surpluses when they exist on other programs. Add to this a chained CPI to reduce future outlays and more means testing for benefits and the program will be solvent for all who participate.
Get rid of the income cap. Why should the highest-paid get a break not available to everyone? BTW, I do get this benefit and could easily live without it. Not that I don't like the extra $ in the latter part of the year, but it is a luxury, NOT a necessity.
This only works until we get another Reagan in the WH who raids SS funds.
If giving your money to Wall street is so much better than SS, why are so many complaining their 401's are wiped out?
Larry Fuller,The best post I've seen about 401 k's.I say if you can afford to take your money to a casino and lose it, then by all means invest in 401 k's.
Since 37% (and growing) retirees rely on Soc.Sec. alone and generally barely get by, it makes sense to me to make it a primary income source by raising contributions several percent - but only by, say, 0.5% per year to avoid killing the economy. I've got friends and relatives living on SS alone who can not afford to do much more in retirement than survive and seek out freebies to entertain themselve. I retired at 56 on a pension similar in size to SS and, even though I had paid-off mortgage and a nest egg to tide me over until SS kicked in, it meant considerable belt tightening. If retirees had a little more to spend it would mean there was a greater, steady supply of spending going into the economy. To fix the current shortfalls and increase the payout, the current employee's 6.25% would have to be raised to around 10% and the employers contribution could be left at 6.25% or raised to, say 8%. That would mean 30%-44% more money being collected by SS. It should EVENTUALLY mean payout increases of 25%-40%. EVENTUALLY because 1) it would take perhaps a decade to get all the increases in place -assuming no major recession- and 2) it would take a generation before retirees had consistently paid-in the larger payroll tax.
oh so now its a stimulus to take earnings from the young working population and redistribute them to retired folk so they can live comfortably?
you people are insane
if your elected officials take care of it right its like putting you money in a 401k. and your sure of putting it in no matter what. that's a good thing. and if something happens everybody works together and takes care of everybody. most Americans don't know how people live in other countries. they should be lucky they are Americans that can participate in social security.
No, I don't want my SS tax to increase. Let the Federal government repay all the IOUs and then prevent the greedy legislators from raiding the fund any further.
You'd have more money than you'd know what to do with it. Oh, silly me. Legislators ALWAYS know what to do with our money - spend it!
I am always amazed by how often and easily people find it to ask for more by "taxing" the rich just a little bit more.
There are too many working Americans on defined contribution retirement plans where social security makes one of the three parts, employee savings make up another while the last is a greatly reduced contribution by the employers. If SS fails there will be a vast number of retirees and current workers affected by reduced retirement security. Put Congress on the same retirement plan and health coverag as every other American and Congress will get things fixed.
TP,Excellent post and I agree 100%. with you.
It always amazes me how easily people find the answer to their problmes by saying "just raise taxes on the rich a little more" Like people who make a lot of money don't deserve to keep what they earn. So there is a cap of $110K or so where the SS tax is no longer applied. Why is it fair to take more from a person making more than that? They will never get that money back. Sure a person of that income level may pay a smaller percentage of their overall income, but they are still putting more money into social security than most. Quit trying to play Robbin-Obama-Hood let people keep what they earn and make do with what is already being stolen from the populace in the form of the current taxes.
The Social Security program was a good idea to force people to save for their retirement, people could or would not save. The fund grew large and would have never had any problems supporting retirees but the politicians saw all that money sitting there and decided to rob it leaving IOU's. We should NOT raise any rates to add more money to give them more funds to waste.
OMG...you think those 1% don't file for their SS as soon as they are able...think again. And most are not receiving income at all to tax at a higher rate thus the recent raising of the capital gains tax.
For those young people that think their payroll taxes just went up well we all use to pay the 6.2 and you just entered work during the "holiday." WE have paid the 6.2 all along.
And just try and find an employer who still has a defined pension plan for new hires..they don't exist anymore, just 401(k)s with a minimum employer match. We just watched those 401(k)s tank.
Savings???...I want my bank to offer 5% compounded quarterly, a toaster, and green stamps.
amazed,Great post.Loved those green stamps and blue chip stamps.Loved the days when banks actually paid interest on savings to encourage people to save.
Social security has been a safety net for folks for 80 years. Question: how many of you (honestly) would have put the money aside for retirement if it was not taken from your checks? I do feel the money must be kept in a fund apart from the general fund especially when we run deficits. If this had been done years ago the fund would have zero issues. When some folks talk about ponzi schemes the wonder how it is that nothing has gone wrong for 80 years?
Younger people who have no chance of ever collecting SS should have the option of opting out.
So the government currently steals a dollar from me now with the promise that they'll pay me back later because I'm supposedly too stupid to manage it for myself, except social security is scheduled for bankruptcy by the time I retire because politicians use MY contributions to buy the elderly voting bloc by increasing their benefits faster than inflation. And the answer is to give them MORE money? The people who voted yes are either the elderly already on the dole or the poor who don't pay anything in anyway. Or you could be as stupid as the government thinks you are.
People who think they're smart say the government can't do anything right, but how about private industry? The banks and Wall Street? The real estate business? They all have such marvelous records at running a business? Have these smart alecs been living in caves for the past decade? This is the same mantras you hear from people who want to privatize Social Security and have you depend on investments in the stock market. My memory's not what it used to be, but wasn't it just a few years ago when lots of smaller investors in stocks cried they lost "everything"?
The rich people know that if you can't afford to lose money in the stock market, you shouldn't buy stocks, because it's just legalized gambling. And this is how Americans are supposed to finance their retirements?
I retired after paying payroll taxes for 46 years. I know I wasn't investing in a private account for myself, but was funding the retirement of my elders, and that didn't upset me, because I knew my turn would come.
Young yuppies can disparage those who retire without adequate funds. Well, sonny boys, maybe they were too busy supporting a family and financing college educations and caring for family members and paying their overcharged medical bills to put aside any substantial savings. Try to do the same things yourself and maybe you won't be so condescending in your attitudes.
Only if they will pass a law that we can hang anyone [congress] taking money and they need to put money back no salary until then I know this won't happen.
would you rather have the bonds (the money is US BONDS) in the hands of the CHINESE or ARABS? At least it's STILL in US hands.