Survey Finds Wide Support for Raising Taxes to Stabilize Social Security

Lawmakers last made major changes to Social Security’s funding structure in 1983, passing a broad reform bill that included both revenue increases (such as accelerating an increase in the payroll tax rate and making some benefit income subject to federal taxes) and benefit cuts (gradually raising Social Security’s full retirement age, or FRA, from 65 to 67).

The 1983 law was projected at the time to keep the trust funds solvent for 75 years, but demographic and economic changes have shortened the timeline. With the birthrate declining and the “silver tsunami” of boomers reaching retirement age, and living longer, the beneficiary population is growing faster than the workforce that funds Social Security via payroll taxes.

In addition, income has been growing faster at the top of the wage scale, meaning less of the country’s cumulative work earnings go toward funding benefits. Since 1983, the share of wages subject to Social Security taxes has declined from 90 percent to 82.5 percent, according to Social Security Administration (SSA) actuaries.

Little support for raising retirement age

The survey was conducted in October and November 2024 and funded by AARP, the National Institute on Retirement Security and the U.S. Chamber of Commerce. It included a “trade-off analysis,” a market-research technique designed to gauge what elements of a product or service consumers value most and will pay for.

In this exercise, participants were asked to choose among packages of policy proposals addressing Social Security’s fiscal challenge, including provisions to reduce benefits, increase benefits, raise additional tax revenue or make no changes. They were told how much, or how little, each package would close the funding gap, based on SSA data. Each choice triggered a fresh set of policy options for the respondent to select or reject.

“By doing that enough times, what emerges is information about which policies people really like to see in the package and which policies they really don't like,” says Rebecca Vallas, chief executive officer of NASI. “It's a uniquely valuable methodology compared to surveys that ask about individual policy options one by one.”

Among 27 provisions that were in the mix, the survey identified three that most increased a package’s appeal:

• Applying the Social Security payroll tax, which in 2025 is assessed on work income up to $176,100 a year, to earnings above $400,000 as well.
• Gradually raising the payroll tax rate from 6.2 percent of gross wages to 7.2 percent for both employees and employers.
• No change to the full retirement age. FRA — the age at which you can claim 100 percent of the benefit calculated from your lifetime earnings record — is currently between 66 and 67 based on year of birth but is set to settle at 67 for those born in 1960 and later.

The policy package most favored by respondents featured these provisions and would also change how Social Security calculates the annual cost-of-living adjustment (COLA) to more directly reflect older Americans’ spending patterns; enhance benefits for people who pause careers to care for young children or are forced to retire early from physically demanding work; and reduce benefits for people with higher retirement incomes from non-Social Security sources.

Compared to making no changes in current Social Security tax and payment policies, the NASI report says, 82 percent of respondents preferred this package, which would eliminate the funding gap. Support was consistent across generations, income and education levels, and party lines.

Among the least popular suggestions were leaving the payroll tax cap as-is, raising the full retirement age from 67 to 69 and increasing benefits by $250 a month for all new Social Security recipients.

“Americans are united in what they want to see for the future of Social Security, and they are united in wanting to see their lawmakers bring revenues into the system to close the financing gap,” Vallas says.