Taxing stocks, estates and employee benefits -2-

"This is the tragedy of what Social Security has become," Greszler said. "The founders did not intend for it to crowd out savings and investing."

Estate taxes

Another option is to take a portion of the federal government's existing estate tax, which is levied on a person's estate after their death, and put that money toward Social Security. The estate-tax exemption is currently $15 million for individuals and $30 million for married couples. A person can leave an unlimited amount to their spouse after their death.

Estate-tax exemptions were not always this high, noted Altman at Social Security Works. In 1996, for example, the exemption was $600,000, and it only reached $1 million in 2002, according to the Tax Foundation.

The maximum federal estate-tax rate is 40% in 2026. If the government were to decide to use estate-tax revenue for Social Security, it could put a portion of the tax revenue toward the program, with the rest going elsewhere. Years before he died in 2008, Robert M. Ball, who served as Social Security commissioner from 1962 to 1973, proposed keeping the estate-tax exemption at $3.5 million with a 45% tax rate, and sending all the revenue it generates to Social Security's trust funds.

"It reinforces the idea that we are a meritocracy," Altman said. "Inherited wealth is fine, but level the playing field."

-Alessandra Malito

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(END) Dow Jones Newswires

10-10-26 1544ET