Capping Social Security
Playing the other side of the coin, Social security taxes are current capped at 12.4% of up to $90,000. According to this article from the EPI, raising the cap for taxes and benefits would almost eliminate the “crisis,” otherwise know as “a shortfall approximately 75 years out.” For anyone who earns above the cap the downside to this is obvious. If you manage your money and invest wisely, you could probably make better returns than will be provided by the Social Security system. That argument misses the whole point. Social Security is about mutual agreement, as a country, that we will not allow those who have contributed throughout their lives to die poor. We don’t ask each tax group whether they would like to pay their taxes, we agree as a country that tax is progressive - the more you earn the higher percentage of your total income you should pay. This, of course, is not how our tax system is currently structured. The more your earn above a certain threshold, the smaller percentage you end up paying, mostly because of loopholes affordable to those with surplus or flexible forms of income. If our Congressional representatives were to ask their constituents their opinions on the Social Security contribution cap, I’d venture to guess that an overwhelming majority (those to whom the cap does not apply because they do not earn more than $90,000 a year) would support removing it without a second thought.