Elizabeth Warren now has a Social Security plan to throw on top of the pile. The gist of it is that the finances of Social Security will be shored up, and benefits will be increased, with the proceeds from a new tax on capital gains, and a change to the current cap to apply FICA to wages over $250,000.
This is a good plan, for the following reasons:
- It is politically shrewd, because it gives Warren a talking point with elderly voters that no one, including Trump, has a response to as of now;
- It is sound policy to address the Social Security deficit now, rather than later; and
- The FICA cap doesn’t make a whole lot of sense, and the capital gains tax is a welcome move towards making all of society, and not just employers and employees, financially responsible for the welfare state.
So why only two cheers? Because the plan creates a doughnut hole between the current cap figure (around $130,000, I believe) and $250,000. That can only be interpreted as a failure of nerve in order to avoid what has historically (and dubiously) been viewed as a middle-class tax increase. Warren is already proposing to increase taxes on those people in order to fund Medicare-for-All, even though she’s doing her best not to admit it; it is time to come clean on that point.