During his 2024 presidential campaign, President-elect Donald Trump made sweeping promises to lower Social Security taxes, end taxes on tips, reduce some income taxes, expand deportations, and impose new tariffs.
However, experts and other critics warn that Trump’s proposed changes could push the Social Security Trust Fund toward insolvency within the next six years.
Trump’s tax policies, which include a reduction in payroll taxes — the primary funding source for Social Security — have drawn concern from experts, economists, and progressive activists who argue that the moves could exacerbate the program’s financial challenges.
The Social Security Trust Fund, which provides benefits to more than 70 million Americans, faces growing shortfalls, and Trump’s proposed cuts and changes to the tax structure could significantly accelerate the program’s insolvency timeline.
The current projections by the Social Security Trustees estimate that, without changes, the program’s trust funds will be depleted by 2034.
After that point, benefits will be reduced by as much as 22 percent across the board, unless Congress acts to reform the system.
Trump’s proposed tax cuts would further reduce revenue for Social Security, potentially moving that timeline closer.
Trump’s promise to lower taxes across the board, including cutting payroll taxes — which fund Social Security — has raised alarm bells.
Payroll taxes, paid by workers and employers, are the backbone of Social Security’s revenue. However, as it stands, high-income earners stop paying into the system once their income surpasses a certain threshold — $168,600 in 2024.
Trump’s plan to eliminate or reduce taxes on tips and further lower payroll taxes would exacerbate this issue, especially since the top 1% of earners already contribute less proportionally than middle-income families.
Social Security is a pay-as-you-go system, meaning that today’s workers fund the benefits of today’s retirees. But this system relies on a large pool of contributors to remain solvent, and the growing gap between low- and high-income earners threatens its sustainability.
Lisa McCormick, a progressive activist who gained national attention for her 2018 insurgent campaign against former New Jersey Senator Bob Menendez, has been vocal in advocating for reforms that would help ensure the long-term solvency of Social Security.
McCormick, who has championed a more equitable tax system, emphasized that the current tax structure disproportionately burdens middle-class workers while allowing the wealthiest Americans to contribute less to the system.
“While 94% of American workers pay Social Security tax on every dollar in their paycheck, the very richest Americans will stop paying Social Security taxes on taxable earnings over $176,100 starting this January,” McCormick pointed out. “This inequity doesn’t have to continue.”
McCormick is advocating for the removal of the earnings cap that allows high-income earners to avoid paying into Social Security on income beyond a certain level.
“If we simply required upper-income Americans to pay the same tax rate as the middle class, Social Security’s benefits could be expanded, and its funding would remain in balance for decades beyond the longest projections,” she said.
Her proposal, which she’s championed through a petition called “Scrap the Cap,” calls for upper-income citizens to pay into Social Security on every dollar they earn, just as the vast majority of American workers do.
This change, she argues, would not only secure the long-term solvency of Social Security but would also help expand benefits for those who need them most.
“By leveling the playing field, we can ensure that Social Security remains a reliable source of income for everyone, including future generations,” McCormick said. “Right now, the system is deeply unfair, and it’s time for the wealthy to contribute their fair share.”
McCormick warned that Trump’s proposed economic policies — particularly his plans to cut taxes and impose tariffs — could further strain Social Security’s finances.
While proponents of Trump’s cuts argue that they would stimulate economic growth and job creation, critics warn that the tax reductions would create a larger budget deficit and shrink federal revenues. This could lead to further pressure on Social Security and other social safety net programs.
At the same time, Trump’s proposals to expand deportations and impose tariffs could have mixed effects on the economy.
While tariffs could provide short-term revenue for the government, they may also disrupt trade, raise prices for consumers, and hurt American industries reliant on global supply chains. Furthermore, the economic fallout from stricter immigration policies could reduce the overall size of the workforce, potentially lowering Social Security’s revenue from payroll taxes.
McCormick, who has long advocated for progressive economic reforms, stresses the importance of civic engagement in securing the future of Social Security. “Americans must rise to the responsibility of citizenship,” she said. “It’s not enough to sit back and wait for others to act. We need to push our leaders to make bold reforms that will ensure that Social Security remains solvent and equitable for everyone.”
McCormick’s push for a more equitable tax system reflects a broader movement among progressives to address the growing wealth inequality in the United States. “A system where the wealthiest Americans pay a lower percentage of their income into Social Security than the middle class is not a system that works for the American people. We need to reform it now, before it’s too late.”
The debate over Social Security’s future is growing increasingly urgent, with the program facing an uncertain financial outlook. As Trump’s campaign promises to cut taxes and reduce Social Security contributions continue to gain traction, experts like McCormick warn that these policies could hasten the program’s insolvency and disproportionately harm future retirees who rely on the program for their livelihoods.
A Call to Action
As the dust settles on the 2024 election, the future of Social Security remains one of the most pressing issues for American voters.
McCormick’s petition to “Scrap the Cap” and her broader economic reform proposals offer a potential solution to the funding challenges facing Social Security.
However, it remains to be seen whether the American public will mobilize around these ideas or if political leaders, including Trump, will continue to push policies that could undermine the program’s long-term viability.
For more information on Lisa McCormick’s economic plans and her vision for reform, or to sign the petition, visit her website at www.democratsfor.us.