That is the title of a June, 2011 article by Dave Johnson that begins like this:
Most people don’t know that there is a huge loophole in the Social Security tax. Believe it or not, after $107K income you don’t pay any Social Security tax. This loophole is called the “cap.” The "cap" loophole is bigger than the loopholes that let big corporations get out of paying their taxes because while not all corporations avoid taxes, the "cap" applies to everyone making over $107K. Closing this loophole would fix all of Social Security's so-called "problems."
This cap means that most of us earning less than the current cap of $110,00 pay Social Security tax on 100% of our income, while others only pay tax on only a much smaller percent of their income.
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Now as politicians consider “tweaking” social security to keep it solvent or totally destroy it, the obvious answer is to close the social security tax loophole by removing the cap, and tax all income equally the way Medicare does.
According to Iowa Senator Tom Harkin in a recent column:
• The Social Security Trust Fund can pay full benefits until 2033. That's another 20 years.
• Social Security is financed by its own revenue stream, the payroll tax and, by law, it cannot add to the deficit. Since the payroll tax will still be collected, even after 2033, Social Security will be able to pay 75 percent of scheduled benefits going forward, assuming that Congress would take no action to address this problem.
He has introduced a bill, the Rebuild America Act, that strengthens Social Security by removing the cap loophole completely over 10 years by:
• Increasing the amount of earnings covered by higher replacement rates in order to increase benefits by approximately $60-70 per month
• Removing the cap, currently $110,100, that unfairly protects the highest earning Americans from paying into Social Security like the majority of hardworking Americans.
All told, according to the Social Security Actuary, this proposal would extend the life of the Social Security Trust Fund to 2052 while cutting the long term funding deficit in half.
Quite simply, we don't have to slash benefits to make the program financially stronger.
It's only fair.