Pundits and politicians frequently make an issue of the 2022 limit for SS taxes of $147,000 of wages – the taxable wage base. Higher income workers who make more than $147,000 annually don’t pay the Social Security tax on any earnings above that level.
Benefits from Social Security do not consider earnings above the taxable wage base so there is no inequity in the system UNLESS you want to change the very design of Social Security as a self-funded insurance program.
Under newly proposed legislation, the payroll tax would kick in again for people earning above $250,000. Only the top 7% of earners would see their taxes go up as a result. In addition new taxes would be imposed on the “wealthy” in the form of taxes on investment income, but of course, with no additional benefits.
FAIR SHARE they claim. That’s a ruse. What is fair is a system that taxes earnings the same for all participants and calculates the benefits on those same earnings – just as Social Security was designed to do.
THE ESSENCE OF THE PROBLEM is that one Congress after the other has failed to make required changes to Social Security and now we are closing in on a crisis. The answer is not to tell Americans the truth and ask all to share in the cost of funding – as should have been done decades ago – but rather to drag out the “fair share, wealthy, millionaires and billionaires rhetoric.” Thus reinforcing the idea that I can get more if only someone else foots the bill. The relief attitude.
Memo by Luther Gulick from his meeting with FDR.