Social Security

Robert Reich -  The real reason Social Security is running out of money is something the trustees never anticipated: how much total income is going to the top.A big part of the American working population today is earning less than the Social Security trustees anticipated years ago — reducing revenue flowing into the program.Had the pay of American workers kept up with the trend decades ago — as well as their growing productivity — their Social Security payments would have kept the program flush.But a much larger chunk of the nation’s total income is now going to the top compared to decades ago. 

Yet income subject to the Social Security payroll tax is capped. No dollar of earnings above the cap is taxed. The cap in 2024 is $168,600.So, as the rich have become far richer, more and more of the nation’s total income has escaped the Social Security payroll tax.  A CEO earning $20 million a year pays Social Security taxes on roughly 1 percent of their income, while a worker earning under the cap pays Social Security taxes on 100 percent of their income.They both end up paying the same amount of money into the program. This isn’t fair. The rise in the amount of income above the cap due to inequality has cost the Social Security Trust Fund reserve an estimated $1.4 trillion since 1983. The solution is obvious: Scrap the cap and make the rich pay more in Social Security taxes.