If you’re still working, you may pay more in Social Security taxes this year. According to Investopedia, each year the federal government sets a limit on the amount of earnings subject to Social Security tax. For 2022, the tax limit is $147,000. Any income earned beyond the wage cap amount is not subject to the 6.2 percent Social Security payroll tax. That means the maximum amount of Social Security tax an employee will have withheld from their paycheck will be $9,114.
Scrap the Cap
Many people believe this formula is not fair and are calling on lawmakers to “Scrap the Cap.” The reason is that the current formula favors high-income wage earners. They do not pay Social Security taxes on income over $147,000. Critics are calling for lawmakers to remove the wage cap so that everyone pays their fair share. They believe the burden falls on lower wage earners and want to see the wealthy shoulder a bigger portion of the taxes that fund Social Security.
By getting rid of the payroll tax cap, proponents say we could continue to support Social Security benefits far into the future. Right now, the Social Security Trust Fund is in danger of being depleted by 2034 if nothing changes.
Saving Social Security
Raising the payroll wage cap is just one of its key proposals. The landmark bill also calls for increasing benefits by about $65 each month for most retirees and establishing a fairer cost-of-living adjustment (COLA) calculator.
We cannot let a lack of adequate funding fail our seniors. We must act now to shore up Social Security for today’s retirees and tomorrow’s. You can show your support for the Social Security Expansion Act by signing our petition.