{P} rofessor Nathasha Sarin of Yale Law School, writing in the Washington Post, makes the case for Social Security reform that is entirely based upon tax increases, preferably focused on high-income Americans. By itself, this is nothing exceptional. In fact, today it’s the default position of practically the entire Democratic Party.

Sarin is no knee-jerk ideologue or party hack. Her academic research shows that, when accrued Social Security benefits are counted as savings similar to pensions or 401(k)s, we find that “top wealth shares have not changed much over the last three decades.” This runs contrary to the dominant progressive view that America has a new gilded age of haves and have-nots.

Yet as Sarin delves into the specifics of Social Security reform, she starts to sound like an ideologue. “Any cuts would be devastating,” she writes, and “especially harmful to non-White households.” “An across-the-board benefit cut would fall hardest on those populations who rely on Social Security most.”

This falsely makes benefit reductions out to be a simple on/off switch that must either apply to everyone equally or to no one at all.

I’ve long argued that Social Security benefits should be increased for the lowest-income retirees. Compared to those of other Anglo countries, Social Security’s safety net is weak. My own reform proposal, unlike even the most progressive Social Security plans, would outright guarantee protection against poverty in old age.

But favoring benefit increases for the poorest retirees doesn’t mean we have to pay ever-increasing benefits to middle- and high-income seniors.

Consider that a two-earner medium-wage couple retiring in 2024 will receive over $59,000 in annual Social Security benefits, providing government-financed benefits exceeding the median household income in Switzerland before they touch even a penny of their own savings.

Now, even that level of benefits may be affordable. What’s not affordable is boosting combined benefits to $76,000 by 2050, as current law will do. Seriously, can we not reduce these benefits at all?

Likewise, a two-earner couple who each earned the maximum salary subject to Social Security taxes, currently $168,000, would retire this year on more than $96,000 in annual Social Security benefits. If that same high-income couple lived in Canada, they would receive $32,750 in combined annual benefits.

How would they survive in this frozen libertarian hellscape to the North? The answer is easy: They would have saved more on their own.

Which leads to a critical passage where Sarin misinterprets the research on how Social Security benefits interact with private savings. She writes, “As economist Martin Feldstein, a top adviser to Ronald Reagan, pointed out in the late 1970s, Social Security and private savings are substitutes. The more workers accumulate in Social Security wealth, the less they save for retirement in other ways during their working years. That substitution effect is greatest for low- and middle-income workers.”

All of that passage is correct, with the crucial exception of the final sentence. And it is that final sentence that points toward a solution to Social Security’s fiscal woes.

Research from the U.S. and abroad does in fact conclude that many households treat government pension payments and personal savings as substitutes. But contrary to Sarin’s statement, these effects are concentrated among higher-income, more-educated households.

This makes sense. Higher-income households must save for retirement on top of Social Security, and their calculation — particularly if they’re aided by a financial planner — will explicitly take Social Security benefits into account. It would not be surprising if high-income households offset Social Security benefits dollar-for-dollar against their own savings. Low-income households, by contrast, have little money to save, little need to save on top of what Social Security provides, and, due to lower levels of financial literacy and the inability to afford financial planning, less ability to take Social Security into account when deciding how much to save.

These facts have important implications for Social Security reform. Namely, if you reduce future benefits for high earners, they’ll save more and work longer to make up the difference. If you increase their benefits, as many progressives propose, they’ll save less. Within reason, changing rich Americans’ Social Security benefits won’t change their total retirement incomes very much. But lower Social Security benefits mean less of their retirement incomes will be provided by a tax-and-transfer program that disincentivizes work and saving, and more will be provided by extended work lives and greater private saving which boost the economy.

This provides an opportunity for Social Security reform that protects the seniors who need the program the most without using every penny of fiscal capacity, much of which may be called on to address the even larger financing gap in Medicare. But first we must get on the same page regarding how much Social Security actually pays out and how those benefits interact with our own personal savings.