Bernie Sanders says taxing income above $250,000 could protect Social Security and boost benefits by $2,400

Sen. Bernie Sanders is renewing his push to make wealthy Americans contribute more to Social Security, arguing that applying payroll taxes to income above $250,000 could strengthen the retirement program’s finances while expanding benefits by $2,400 a year.

The Vermont independent’s proposal goes beyond his recent social media post. Sanders introduced the Social Security Expansion Act, S. 770, in February 2025 with Sen. Elizabeth Warren and other lawmakers. The legislation combines higher taxes on high earners and certain investment income with changes to benefit calculations, cost-of-living adjustments and minimum benefits.

Sanders says the plan would expand benefits by $2,400 annually, or $200 a month, and keep Social Security solvent for 75 years. A Social Security Administration actuarial analysis of an earlier version of the legislation supports the broader claim that a package of tax and benefit changes could cover scheduled benefits throughout the 75-year projection period. However, the $2,400 figure should not be interpreted as a guaranteed, identical increase for every beneficiary.

The debate comes as Social Security faces a new financing deadline. The 2026 trustees report projects that the Old-Age and Survivors Insurance trust fund, which pays retirement and survivor benefits, will deplete its reserves in the fourth quarter of 2032. Without legislative action, continuing revenue would cover only about 78% of scheduled benefits.

Bernie Sanders says billionaires should pay more into Social Security

Sanders made his case in a post on X: “Billionaires pay the same amount into Social Security as someone making $184,500.

If we ended that absurdity & applied the payroll tax to all income above $250,000, Social Security would be solvent for 75 years & benefits would be expanded by $2,400.

Let’s do it.”

His argument centers on the annual limit on earnings subject to Social Security payroll taxes. For 2026, that taxable maximum is $184,500. Workers pay the 6.2% employee tax on covered earnings up to that amount, while employers generally pay a matching 6.2%. Earnings above the limit are not subject to the Social Security portion of the payroll tax under current law.

That means a worker earning $100,000 pays Social Security tax on all covered wages, while a worker earning $1 million pays the tax on only the first $184,500. The employee’s maximum Social Security tax for 2026 is $11,439, excluding Medicare taxes and other applicable taxes.

Sanders argues that high earners should contribute on more of their income instead of benefiting from a cap that limits the payroll tax on their wages. His proposal would apply the tax to earnings above $250,000, while leaving households earning $250,000 or less outside the new threshold for additional taxation under the proposal’s stated framework.

However, a billionaire’s wealth is not the same as annual wages. Much of a wealthy person’s fortune may consist of stocks, real estate or ownership stakes in businesses. That distinction helps explain why the legislation addresses certain investment income in addition to wages.

Sanders’ Social Security Expansion Act puts the proposal into legislation

Sanders and Warren introduced the Social Security Expansion Act, S. 770, on February 27, 2025. The bill was referred to the Senate Finance Committee.

Sanders’ office said the legislation would expand benefits by $2,400 a year, keep Social Security fully funded for 75 years and require higher contributions from people with incomes above $250,000. The announcement also describes changes intended to strengthen benefits for retirees and other beneficiaries.

The official bill text and announcement provide more detail than Sanders’ tweet alone. They show that the proposal is not simply a plan to raise payroll taxes on wealthy Americans. It combines additional revenue with changes intended to improve retirement benefits, including a more generous benefit formula, larger cost-of-living adjustments and a stronger minimum benefit.

The bill is not law. Its introduction and referral to committee do not mean Congress has approved the changes or that recipients are entitled to the proposed increase.

Readers can consult the official text and legislative record for S. 770 and Sanders’ announcement of the legislation.

How Sanders’ proposal would increase Social Security benefits

The $2,400 figure is a central selling point, but the legislation’s benefit provisions explain why the plan is more complicated than simply taxing more income.

An earlier version of the Social Security Expansion Act was examined by the Social Security Administration’s Office of the Chief Actuary in a February 2023 letter requested by Sanders. The actuarial analysis evaluated a package of proposed changes using the assumptions in the 2022 trustees report.

Among the provisions were changes to the benefit formula, which determines how a worker’s average indexed monthly earnings translate into an initial retirement benefit. The proposal would increase the first benefit-formula factor from 90% to 95% and raise the first bend point by 22%.

The plan would also use the Consumer Price Index for the Elderly, or CPI-E, to calculate cost-of-living adjustments instead of the current CPI-W measure. The SSA analysis estimated that the change would raise annual cost-of-living adjustments by an average of 0.2 percentage point.

Other provisions would strengthen the special minimum benefit for workers with long careers and low earnings and extend benefits for certain children of deceased or disabled workers through age 22 when they attend qualifying educational programs.

Together, these provisions explain how Sanders’ proposal could expand benefits beyond the effect of raising the payroll tax cap. The additional revenue and the benefit changes are separate parts of the legislation.

The $2,400 figure, equivalent to $200 a month, is the increase Sanders’ office promotes for the legislation. The official sources reviewed do not establish that every recipient would receive precisely that amount. Actual effects would depend on the provisions, eligibility and an individual’s circumstances.

The SSA actuarial letter published by Sanders’ office provides the technical analysis behind the proposal.

High earners would pay more without automatically earning larger benefits on the additional income
A key detail in the SSA’s analysis is that the earlier proposal would tax earnings above $250,000 without providing additional Social Security benefit credit for those newly taxed earnings.

That means a high earner would pay more into the program but would not automatically receive a larger retirement benefit calculated from every additional dollar subjected to the new tax.

Instead, the proposal would expand benefits through separate changes to the benefit formula, cost-of-living adjustments and minimum benefits. The distinction is important because the legislation is designed to raise revenue from higher-income households while improving benefits more broadly.

The proposal also goes beyond wages. The SSA’s analysis includes a separate 12.4% tax on certain investment income above existing thresholds, including capital gains and dividends, as well as provisions addressing certain active business income.

This matters because many very wealthy Americans derive substantial income from investments rather than salaries. Taxing wages above a threshold alone would not necessarily capture all the income associated with a person’s wealth.

The exact treatment of each type of income depends on the legislative provisions. The actuarial analysis of the earlier bill should not be treated as proof that every version of a $250,000 tax proposal would have identical effects.

SSA analysis supports the 75-year solvency claim, with qualifications

The February 2023 actuarial letter provides the strongest technical support for Sanders’ claim about long-term solvency. The SSA’s Office of the Chief Actuary found that the earlier package of provisions would allow the combined Social Security trust funds to pay scheduled benefits in full throughout the 75-year projection period.

That finding was based on the assumptions in the 2022 trustees report and on the specific package of tax and benefit changes analyzed at the time. It does not establish that any proposal that raises taxes above $250,000 would necessarily achieve the same result.

The distinction is especially important because Social Security’s financial outlook changes as wages, inflation, employment, fertility, mortality and other economic and demographic factors evolve. Updated assumptions can change how much additional revenue is needed to cover scheduled benefits.

The SSA has also modeled other approaches to raising payroll taxes, including eliminating the taxable maximum without awarding additional benefit credit for earnings above the current cap. Those scenarios differ from Sanders’ full legislative package and can produce different solvency results.

The most accurate conclusion is that the SSA actuarial analysis supports the feasibility of the earlier package under its stated assumptions. It does not guarantee that the proposal will become law or that the same results will hold under every subsequent forecast.

Social Security faces a 2032 retirement trust fund deadline

The financing debate has become more urgent as the retirement trust fund approaches projected reserve depletion.

The 2026 trustees report projects that the Old-Age and Survivors Insurance trust fund will deplete its reserves in the fourth quarter of 2032. At that point, continuing revenue would cover approximately 78% of scheduled retirement and survivor benefits if Congress has not changed the law.

That does not mean Social Security would stop paying benefits altogether. Payroll taxes and other continuing income would still come into the program, but they would not be sufficient to pay the full amounts scheduled under current law.

The combined projection for the retirement, survivor and disability trust funds is different. The 2026 report projects combined reserves would be depleted in the third quarter of 2034, when continuing revenue would cover about 83% of scheduled benefits. The combined figure is useful for assessing the program as a whole, although the trust funds are legally separate under current law.

The shortfall reflects demographic and financial pressures, including the retirement of the baby-boom generation, longer life expectancies and changes in the ratio of workers paying into the system to beneficiaries receiving payments.

Lawmakers could respond with additional revenue, changes to scheduled benefits or a combination of approaches. Acting before reserves are depleted would give Congress more time to phase in changes.

The latest figures are available in the Social Security trustees’ reports.

Tax Foundation warns that lifting the cap would not resolve every problem

A community note attached to Sanders’ social media post links to a Tax Foundation analysis of proposals to raise Social Security payroll taxes on high earners. The organization examines the fiscal and economic trade-offs of lifting the cap, including a related proposal from Sen. Bernie Moreno and Warren that would tax earnings above the existing limit without providing corresponding additional benefits.

The Tax Foundation estimates that eliminating the cap would raise approximately $3.2 trillion from 2027 through 2036 before accounting for economic effects, or about $1.5 trillion after those effects. It also projects that the policy would reduce long-run gross domestic product by 1.5% and cost 1.8 million jobs.

Those figures are the Tax Foundation’s estimates, not official government forecasts. They depend on its modeling assumptions presented as the organization’s assessment rather than settled outcomes.

The organization argues that raising the cap would bring in substantial revenue but would not, on its own, eliminate Social Security’s long-term funding shortfall. It also warns that higher payroll taxes could influence employment, compensation and economic decisions.

The analysis is relevant to Sanders’ proposal, but it does not evaluate every provision of the Social Security Expansion Act as a single package. In particular, a plan that combines a higher tax threshold with changes to benefits and investment-income taxation is different from simply eliminating the existing wage cap.

Other Social Security reforms could spread the costs differently

Raising taxes on high earners is one option for addressing the funding gap, but lawmakers have several alternatives.

They could increase the payroll tax rate, adjust the benefit formula, change the retirement age, broaden the range of income subject to payroll taxes or combine revenue increases with benefit changes.

Each option would distribute the costs differently. An increase in the payroll tax rate could affect a broad range of workers, while lifting the cap would concentrate additional taxes on people earning above the current threshold. Changes to benefit formulas or retirement ages could reduce the amount some people receive or alter when they can claim full benefits.

The Tax Foundation has also examined broadening the payroll tax base to cover certain forms of compensation that are currently excluded, including employer-sponsored health insurance. It estimates that eliminating the exclusion for employer-sponsored health insurance could raise $1.8 trillion over a decade, with a smaller projected economic effect than eliminating the wage cap.

Supporters of higher taxes on wealthy Americans argue that those households have a greater ability to contribute without facing the same financial pressure as middle- and lower-income workers. Critics argue that additional payroll taxes can affect economic activity and that revenue increases alone may not permanently resolve Social Security’s financing problems.

The disagreement is therefore not simply about whether the program needs additional funding. It is about who should pay, how benefits should be calculated and whether revenue increases should be paired with other reforms.

What Sanders’ proposal could mean for retirees and younger workers

For current retirees, the immediate concern is whether Social Security will continue paying scheduled benefits in full. Many households rely on the program to cover essential expenses, including housing, food, utilities and medical care.

For younger workers, the concern is whether the benefits they expect to receive decades from now will be available under current law. The projected depletion of trust fund reserves does not mean Social Security will disappear, but it does mean continuing revenue would not cover all scheduled benefits without legislative action.

Sanders’ proposal offers one approach: collect more revenue from high earners and certain investment income while expanding benefits through changes to the formula and cost-of-living adjustments. Its supporters argue that the wealthy should contribute more rather than shifting the burden to retirees through benefit cuts.

Opponents of lifting the cap point to potential economic consequences and argue that Congress should evaluate a wider set of reforms. The ultimate effect on households would depend on the details of the legislation, whether it becomes law and how Congress balances revenue, benefit levels and long-term solvency.

The Social Security Expansion Act remains a proposal, not an enacted benefit increase

With the retirement trust fund projected to deplete its reserves in 2032, the larger question is how Congress will address the gap between scheduled benefits and continuing revenue. Whether lawmakers choose higher taxes, benefit changes or a combination of measures will help determine how much future beneficiaries receive and who bears the cost of keeping Social Security financially sustainable.
The key improvement is that the article now distinguishes what Sanders’ bill explicitly proposes, what the SSA actuarial analysis supports, and what remains an estimate rather than a guaranteed outcome. That makes the $2,400 headline more defensible while preserving the strong financial hook.

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