But in the end, he argued, this formula is primarily based on an income-redistribution plan rather than primarily a required-savings plan. “This violates the fairness principle of any required-savings program that pretax benefits should be closely related to the level of contributions or taxes paid into the system,’’ he said.   

After-tax benefits received by a higher-income worker per dollar of Social Security taxes paid are about one-eighth the level of benefits received by a low-income worker, he argued. Moreover, workers with at least 35 years of prior earnings typically receive little, if any, additional benefits for the extra Social Security taxes they pay. Reichenstein said.

Reichenstein said a key feature of the 401(k) and other retirement-savings plan is that their pre-tax benefits are proportional to contributions made. If someone pays twice as much into the retirement-income portion of the Social Security system as another person, he or she should expect to receive almost twice as much in pretax benefits. The worker would pay more in taxes, so the system would still be progressive in terms of after-tax dollars.

“While some income redistribution is acceptable, the retirement-income portion of the Social Security program should be reformed to more closely tie pre-tax benefits to contributions made into this portion of the system. The retirement-income portion should be primarily a required savings plan,” he said.  

Reichenstein said he has yet to hear a satisfactory proposal from a politician. 

Many advocates of entitlement reform have argued the opposite of Reichenstein, favoring the reduction of benefits for upper-middle class and wealthy individuals.

For example, former N.J. Gov. Chris Christie had proposed means-testing benefits, which would reduce benefits for retired seniors earning more than $80,000 and eliminating the benefit entirely for individuals making $200,000. But Reichenstein said such a proposal simply punishes people for saving.

Others argue the current system doesn't go far enough and want affluent Americans to pay even more. Presidential candidate Bernie Sanders and Rep. Peter DiFazio (D-Ore.) proposed legislation that seeks only to raise the contributions of affluent Americans. Called the Social Security Expansion Act, it would tax earnings above $250,000 but grant no additional benefits for these taxpayers.

It also would tax investment income above the 12.4% threshold and provide no additional benefits for these taxes. As for the investment income, Reichenstein said that unearned income is not part of the required-savings program and was never meant to be. “So, both of these tax higher-income people and distribute taxes to low-income people. This is purely income-redistribution,” he said.

The proposal that has a good chance of going through the House but will probably not pass the Senate is Rep. John Larson’s Social Security 2100 Act, he said. The legislation would ensure Social Security is sustainably solvent beyond this century. But it also calls for increasing the first AIME-to-PIA percent from 90% to 93% and tax earned income above $400,000 at the current 12.4% tax rate, with the rate eventually rising to 14.8%. The bill would increase the taxpayer’s PIA by applying a 2% factor to the additional income that is taxed.