According to new reports, Democrats are planning a massive tax hike which would affect virtually the entire American middle class, in an effort to expand funding for benefits going to retirees.
The proposed hikes would reportedly amount to approximately $1.5 trillion dollars during the first 12 years, crippling business owners and requiring families to pay staggering increases in annual taxes.
If passed, Democrats’ Social Security 2100 Act would increase taxes on working-class families as well as employers to around $340 billion more by its final stage.
Estimates approximate that the move would cost middle class families around $1,500 more each year in taxes.
Amid all the hoopla about Democrats wanting to raise taxes on the rich, they are quietly working on a bill that would increase taxes on every working family in America. Why? To fund expanded benefits for baby boomers hitting retirement.
The Social Security 2100 Act would hike the combined payroll taxes paid by workers and their employers from 12.4% today to 14.8% by 2043. The bill would also apply the payroll tax on incomes over $400,000.
According to the Social Security Administration, in the first 12 years alone, this would amount to a $1.5 trillion tax hike.
Once the tax hike’s fully phased in, workers and employers will be paying $340 billion more a year in payroll taxes.
As a share of GDP, Social Security taxes would rise to 6.5%, up from the current 4.5%.
For families making the median income, it means paying an extra $720 a year to Social Security. But that’s only half the tax bite. The employer’s share effectively comes out of workers’ pockets as well, in the form of lower wages. So, the real increase is more like $1,400 a year.