Sen. Elizabeth Warren (D-MA), a 2020 presidential candidate, has been known for always having a plan — and her latest is on how to expand Social Security.
In a Medium post, Warren detailed her proposal and said that it will mean an immediate Social Security increase of $200 a month.
“The core of my plan is simple,” Warren stated. “If you get Social Security benefits now, your monthly benefit will be at least $200 more — or at least $2,400 more per year. If you aren’t getting Social Security benefits now but will someday, your monthly benefit check will be at least $200 bigger than it otherwise would have been.”
And how would she pay for this plan? It goes back to one of her core platforms: taxing the top 2%.
The plan would increase benefits for low-income families, women, people with disabilities, people of color, and public-sector workers, the post stated, while also extending the lifespan of the Social Security program for nearly two more decades.
‘It’s time to expand Social Security’
Under the plan, those who earn above $250,000 would have a 14.8% Social Security contribution evenly divided between employees and employers. And the plan would establish a 14.8% Social Security contribution requirement on net investment income for individuals that annually make more than $250,000 or families making more than $400,000.
Warren has highlighted wealth inequality as one of the reasons why she is running for president. Her solution to fixing this issue is a wealth tax, which would entail a 2% wealth tax on individuals with a net worth over $50 million and a 3% tax on those over $1 billion.
After a Politico poll indicated that 61% of Americans support her wealth tax, she said she wasn’t surprised. She added that "Washington has been working so long for the billionaire class that people around here cannot imagine crossing them.”
Whether or not the Social Security plan would be successful remains to be seen, though an independent analysis by Moody’s Analytics backs up many of her claims. It found that although it would reduce real GDP growth in 2020, it would be by only 0.2%. And that real GDP growth “is ultimately lifted by the increase in national saving under the plan.”
It would also lift nearly 5 million elderly people out of poverty and increase Social Security benefits by nearly 25% for those in the bottom half of the income bracket, according to Moody’s. The analysis also stated that Warren’s Social Security plan would cut the nation’s deficits by over $1 trillion between 2020-2029.
“It’s time Washington stopped trying to slash Social Security benefits for people who’ve earned them,” Warren said. “It’s time to expand Social Security.”
Adriana is an associate editor for Yahoo Finance. Follow her on Twitter @adrianambells.