Some Republicans want to raise taxes — to save Social Security. Here’s why

Christy Bieber

Thu, September 10, 2026 at 2:35 PM GMT+3 8 min read

Bill Clark / CQ-Roll Call, Inc via Getty Images

Moneywise and Yahoo Finance LLC may earn commission or revenue through links in the content below.

Republicans are well known for opposing tax increases and since 1986, many Republican officeholders have signed on to the Taxpayer Protection Pledge (1).

Rolled out with former President Ronald Reagan's endorsement, the pledge is a commitment in writing to oppose "any and all" tax increases. Currently, 44 members of the Senate and 194 representatives in Congress have signed the pledge.

Top Picks

Jeff Bezos backs a platform that lets anyone invest in rental homes for as little as $100 — 6 ways to build wealth like a landlord without actually being one
A record 45% of central banks plan to grow gold reserves — and many investors are following suit. Get your free gold IRA guide from Priority Gold
A single line on your car insurance policy could be inflating your premium by up to 30% — here's what to change

In light of the party's long-standing anti-tax position, prominent Republicans' recent willingness to consider a Social Security tax increase represents just how dire Social Security's financial state is.

While overtures toward tax increases from some in Republican leadership show that a compromise on Social Security may be possible, they would also result in a significantly larger tax bill for some Americans — and potentially a fundamental shift in how one of America's most popular and long-standing social insurance programs is funded.

Why Social Security needs reform

When Social Security was created, former President Franklin Roosevelt wanted it to be an entitlement and not welfare. Workers were to pay into the system and earn the right to benefits in the future (2). However, each worker's money wasn't put into a separate account earmarked for their own retirement. Instead, their money funds the benefits of current retirees (3) in the form of the Old-Age and Survivors Insurance (OASI) Trust Fund.

For a long time, there were more workers than retirees, so the system worked. But an aging population, reduced birth rates and reduced immigration have changed that.

Social Security is paying out more than it collects, drawing money from its trust fund or financial reserves. The problem is that the OASI Trust Fund reserves are projected to run out in 2032, necessitating a 22% benefit cut (4).

This would have dire consequences for beneficiaries, as around two-thirds of retirees rely on Social Security for over half their income, according to The Senior Citizens League (5).

A fix has long been needed, but efforts at reform have failed, including a compromise plan spearheaded by President Obama (6).

Conflicts exist over an appropriate solution, with proposals including raising the full retirement age, offering less generous cost of living adjustments, means-testing benefits and raising the payroll tax (7). However, since raising taxes was a non-starter for Republicans in the past, finding consensus has been a challenge.

But that's no longer the case.

Proposals for Social Security reform

Sen. Bernie Moreno, a Republican from Ohio, recently joined with Sen. Elizabeth Warren, a Democrat from Massachusetts, to put forward a proposal that would raise the payroll tax cap (8), resulting in high earners paying more in Social Security taxes.

The idea has gained steam and won support from Rep. Tom Cole, a Republican from Oklahoma and chairman of the House Appropriations Committee (9).

Currently, there's a wage base limit, or cap on the wages subject to Social Security taxes, included in the Social Security benefits calculation. The cap exists to prevent high earners from collecting very high benefits, as benefit payments are directly linked to taxes paid under the current system.

For 2026, that cap is $184,500 (10).

But the new proposal would uncouple that link, resulting in some workers paying a much larger tax with no corresponding benefits increase. This would break the connection between contributions and benefits that was so important to Roosevelt, but some estimates suggest it would also close over half the current funding shortfall (11).

This change would likely be combined with other reforms that give the Republicans cover to compromise, yet it would result in some higher-earning Americans ending up with a marginal tax rate topping 50% (12).

Still, both lawmakers and experts may be realizing that the gap is simply too big to fill without a comprehensive solution and the political fallout from a 22% cut to Social Security benefits would likely be far greater than the distress resulting from unsatisfying reforms.

With the threat of tax hikes moving closer to reality, those who will be affected if Social Security taxes increase might want to explore their options sooner rather than later — if they want to shield some of their hard-earned money from a bigger tax bill.

The tax benefits of real estate investing

Institutional investors have long looked to private-market real estate as a way to help stabilize their portfolios. This asset class offers a mix of potential tax benefits, regular cash flow, a hedge against inflation and returns that are less correlated with public equities.

However, individual investors haven't historically had great options for accessing high-quality, private-market real estate.

That's starting to change. In recent years, real estate platforms have opened access to a broader demographic, but outcomes often depend on factors like deal structure, platform incentives and the expertise of the sponsor.

For instance, Lightstone DIRECT's direct-to-investor model ensures a high degree of alignment between individual investors and a vertically-integrated, institutional owner-operator — a sophisticated and streamlined option for individual investors looking to diversify into private-market real estate.

With Lightstone DIRECT, accredited individuals can access the same multifamily and industrial assets Lightstone pursues with its own capital, with minimum investments starting at $100,000.

You can also tap into real estate by investing in shares of vacation homes or rental properties through platforms like Arrived. Backed by world-class investors, including Jeff Bezos, Arrived allows you to generate passive income without the extra work that comes with being a landlord of your own rental property.

To get started, simply browse through their selection of vetted properties, each picked for their potential appreciation and income generation. Once you choose a property, you can start investing with as little as $100.

Plus, for a limited time, when you open an account and add $1,000 or more, Arrived will credit your account with a 1% match.

Invest in a gold IRA

Gold is another hedge against inflation that could earn a place alongside other assets in a diversified portfolio. While it doesn't generate interest or dividends, its value can still rise when investors are looking for a safe haven during periods of economic uncertainty.

One way to invest in gold that also provides significant tax advantages is to open a gold IRA with the help of Priority Gold.

Gold IRAs allow investors to hold physical gold or gold-related assets within a retirement account, which combines the tax advantages of an IRA with the protective benefits of investing in gold. This makes it an attractive option for those looking to potentially hedge their retirement funds against economic uncertainty.

To learn more, you can get a free information guide that includes details on how to get up to $10,000 in free silver on qualifying purchases.

Work with a financial professional for help

Finally, if you need help securing your financial future regardless of whether taxes increase, Social Security benefits are cut or other reforms happen, working with a financial advisor can reduce some of that burden.

In fact, Vanguard research (13) has revealed that working with a financial advisor can add about 3% to net returns over time. That makes more of a difference than you'd expect when returns are compounded over years. For instance, if you started with a $50,000 portfolio, professional guidance could mean more than $1.3 million in additional growth over 30 years, depending on market conditions and your investment strategy.

This kind of additional growth can help you if Social Security benefit cuts do ultimately occur, while investing money in tax-advantaged accounts could shield more of your funds from any potential tax increases.

That's why finding reliable advisors is crucial — and where Advisor.com can come in, connecting you with an expert in your area for free.

Advisor.com does the heavy lifting for you, vetting advisors based on track record, client ratios and regulatory background. Plus, their network comprises fiduciaries, who are legally required to act in your best interests.

Just enter a few details about your finances and goals and Advisor.com's AI-powered matching tool will connect you with a qualified expert who can offer personalized guidance so that you thrive in retirement — even as America's most popular retirement program changes.

What To Read Next

The tax breaks in Trump's 'big beautiful bill' expire after 2028. Here are 4 moves to make before the window closes
Dave Ramsey warns nearly 50% of Americans are making 1 big Social Security mistake. Here's what it is and 3 simple steps to fix it ASAP
Millionaires under 43 hold only 32% of their wealth in stocks. Here's where their money is actually going
Dave Ramsey says this 1 indulgent purchase stops Americans from becoming wealthy. Here's what he recommends instead

Get Warren Buffett's best investing lessons, free. Join 250,000 readers getting Moneywise's sharpest money reporting every week. Subscribe and we'll send you our guide to the ideas that built Buffett's fortune as a welcome gift.

Article Sources

We rely only on vetted sources and credible third-party reporting. For details, see our ethics and guidelines.

Americans for Tax Reform (); Social Security Administration (), (), (), (), (); Congress.gov (); Seniors League (); American Enterprise Institute (); U.S. Senate (); The Washington Post (); Manhattan Institute (); Vanguard ()

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.