We all know that the Social Security Trust Fund is dwindling. If nothing is done, we could see drastic benefit cuts starting in about ten years. Retirees aren’t the only ones worried about this. It seems lawmakers are beginning to stir, as time is running out to take action to shore up Social Security.

Social Security is funded through payroll taxes, which currently only apply to wages up to $147,000. According to an article by CNBC, one idea gaining traction on Capitol Hill is to raise taxes on high wage earners making $400,000 and up a year.

This idea is popular with the public. So much so that it even has its own campaign slogan — “Scrap the Cap.”

Call for Change

Many people think the Social Security payroll tax is not fair. They want to see high-income earners pay a bigger chunk of their earnings in taxes. Right now, everyone pays the same amount of payroll taxes — 6.2 percent of income — up to $147,000. You don’t need to pay payroll tax on income over that.

Some lawmakers have proposed reapplying the Social Security payroll tax starting at $400,000 in wages. Earnings up to $147,000 would still be taxed. Then there would be a gap where the taxes were no longer applied until wages reached $400,000 and then the tax was assessed again.

The article says other options include applying the tax on all wages or creating a surtax specifically for higher earners, and possibly reducing the benefits they receive.

Time is Running Out

Experts warn the clock is ticking. The longer Congress waits to act, the less likely raising the taxable wage base will be enough to solve Social Security’s funding issues. The founder of a Social Security claiming software company warned that even if all wages are taxed, the additional payroll taxes will not cover all of Social Security’s shortfall. This means benefit cuts might still be necessary. So, Congress needs to stop delaying this important issue and take action.

Our Best Bet

The Seniors Trust believes the best bet to shore up Social Security is for lawmakers to enact the Social Security Expansion Act. It calls for lifting the cap on Social Security taxes to ensure that the wealthiest Americans pay a fairer amount in relation to their income. The bill’s sponsors say doing so would “extend the solvency of Social Security for about 52 years to the year 2071.”

Additionally, the Social Security Expansion Act would provide bigger monthly benefits — about $65 on average. It will also establish a fairer cost-of-living adjustment (COLA) by using the Consumer Price Index for the Elderly (CPI-E) instead of the Consumer Price Index for Urban Wage Earners (CPI-W) used currently because the CPI-E takes into account the unique spending habits of seniors.

To show your support for the Social Security Expansion Act, please sign our petition to Congress.