The Social Security Tax Wage Base Continues to Climb but Not High Enough
Social Security is funded by income tax paid by working individuals. However, not all income is subject to the Social Security tax. As Kiplinger Personal Finance explains, that’s because of the “Social Security wage base,” which is the maximum amount of earnings subject to Social Security tax.
In 2024, the Social Security wage base limit increased 5.2 percent to $168,600. That’s $8,400 more than last year’s $160,200. Translating that to actual dollars and cents, someone making over $168,600 this year will pay about $521 more in Social Security taxes than they did last year.
Scrap the Cap
Many people believe the wage cap is unfair, as it puts the tax burden on lower-income workers. Many critics want to see wealthier Americans shoulder a bigger portion of the taxes that support Social Security by “scrapping the cap” and subjecting all income to Social Security tax.
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 within 10 years if nothing changes.
A recent article by Bloomberg found that “About 180 million Americans contributed a total of $943 billion to Social Security in 2021. Ending the cap for the 5 percent of U.S. workers who earn more than $160,200 would increase revenue by more than $150 billion.”
Saving Social Security
The Seniors Trust believes the best way to solve many of Social Security’s solvency issues is to enact the Social Security Expansion Act.
Raising the payroll wage cap is just one of its key proposals. The landmark bill also calls for increasing benefits by about $200 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.
