Bernie Sanders calls for scrapping the cap on the Senate floor

Video: Youtube / WeAreSocialSecurity / CSPAN2 Public Domain

Senator Bernie Sanders has long been in favor of “scrapping the cap,” or lifting the current taxable income cap that allows high-income earners to avoid paying the Social Security tax on the entirety of their income.

In 2017, the taxable income cap was raised from $118,500 to $127,200.  This means those who have earned $127,200 or less in a year will see the 6.2% Federal Insurance Contributions Act (FICA) tax applied to 100% of their earnings.

Those who have earned more than $127,200, on the other hand, are only expected to pay the FICA tax — the payroll tax that funds Social Security and Medicare — on their first $127,200 in income.  Since a vast majority of Americans make less than this amount annually, most Americans have all of their income subjected to the tax.

High-income earners, however, are only required to contribute on $127,200 — in the case of millionaires and the extremely wealthy, this means contributing on a mere fraction of their yearly earnings compared to the 100% most people pay.

Many of our elected leaders believe raising or eliminating that cap altogether is the simplest and most effective way to extend the solvency of the Trust Fund by several decades without cuts or reductions to most beneficiaries. In fact, Sander’s recently introduced legislation, the Social Security Expansion Act, would only need to raise this cap to $250,000 to extend solvency for 40 years and finance significant increases in benefits.

In this 2014 Senate floor speech, Senator Sanders explains why he supports scrapping the cap — a major feature of his 2017 Social Security reform bill.