With every paycheck, we contribute to Social Security. So do our employers. That’s how the program is funded. Then when we reach retirement age, incur a disability, or if a breadwinner dies, we are protected by modest but dependable monthly benefits. Maids, mechanics and millionaires – nearly all of us are covered because nearly all of us contribute.
But we don’t all contribute equally. Social Security taxes are collected only on the first $113,700 of earnings each year. That means high earners – like CEOs and Wall Street executives – pay a lower tax rate than Joe or Jane Worker.
That $113,700 ceiling known as the “cap” is arbitrary and unfair. If we simply “Scrap the Cap,” requiring Social Security taxes on all earnings, high earners would pay their fair share. That would enable us to strengthen Social Security benefits for future generations.