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

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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.

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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.

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).