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Can taxing the wealthy save Social Security? Eliminating the Social Security maximum limits on taxable income to tax the wealthy would not completely fix the program's looming insolvency. While it would bring in more money to the system, according to this article on Motley Fool, some industry observers say it would also bring unintended consequences. Proponents of such a move note that it would address a major swath of Social Security's shortfall. Indeed, according to the American Academy of Actuaries, eliminating the tax max altogether could address 88% of the program's long-term deficit. However, a 2014 report from the Heritage Foundation, a conservative think tank, laid out the opposing a view as such: Higher-income workers generally have more flexibility to work less when marginal tax rates rise. But when workers cut back on work and receive less take-home pay, they also tend to cut back on savings and investment. Less work, lower incomes, smaller savings, and less investment are harmful to economic growth, which in turn, is detrimental to tax revenues. The article concludes by saying that there's no way to predict what will happen with the program, but if clients assume that their benefits will be reduced, and that motivates them to save and invest more now, it'll only be beneficial in the long run. --Motley Fool
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