I would bet that most Americans don't know that there is a limit on Social Security tax. You stop paying Social Security tax after you've earn $97,500 in a year. Most Americans don't know because they don't make that much. It doesn't apply jointly, however. If you and your spouse make $150,000 combined for example and you both make 75,000 per year, you would pay tax on all of that money. But if you alone make $150,000 per year, you pay tax only on the first $97,500 per year.
Everything above 97,500 per year is tax free for Social Security!
There is a conspiracy of confusion and silence around this issue. Barack Obama has said what Hillary has refused to say - that we ought to lift this cap.
One possible option, for example, is to raise the cap on the amount of income subject to the Social Security tax. If we kept the payroll tax rate exactly the same but applied it to all earnings and not just the first $97,500, we could virtually eliminate the entire Social Security shortfall.
A little context below the fold:
Social Security means that current workers pay through their taxes Social Security benefits to the retired. The money goes into a trust fund that earns interest and benefits are paid out the fund. In the 1980's, taxes were increased to make the inflow greater than the outflow to allow the fund to grow a surplus that would sustain it through the time when "Baby Boomers" retire and there would be more retirees than workers to provide for them.
There is considerable debate as to how long the fund will remain solvent. Some say it's fine, others say it will run out of money somewhere around 2042. Or maybe not..... There's even some debate as to whether the trust fund is real.....
But all this argument is mostly political. The Republicans have been wanting to get rid of Social Security since its inception. Why? Who the hell knows? Republicans and Democrats benefit from it. It's a good system, and important.
However, if there is any debate over the solvency of the trust fund, it could be solved by taxing those who are now NOT PAYING ANYTHING on a large chunk of their income.
I used to be a Hillary supporter, but I've switched to Obama over this issue. Hillary has proposed a commission to study it, which is the classic political dodge. She's said she doesn't want to raise taxes on the middle class. Being middle class means a single earner in the household earns over 97,500 per year??? You could conceivably reduce taxes on people earning less than 97,500 per year if you taxed the rest of the people earning more than that.