A small tax increase would make the essential national retirement program secure for decades, our columnist says, but lawmakers would have to take action.
“An increase in the 12.4 percent Social Security payroll tax of 3.5 percentage points — half borne by employers and half by employees — is all that’s needed to keep full Social Security benefits flowing in the 2030s and beyond, Professor Munnell explained in a telephone conversation.”
You don’t have to increase the percentage with-held AT ALL.
The 12.4% payroll tax only applies to the first $168,600 of earned income.
So what you do is eliminate that cap, like we ALREADY do for the Medicare tax.
In fact, if you removed the cap AND applied the tax to other forms of income, such as capital gains, we could probably reduce the percentage and bring in more money.
“An increase in the 12.4 percent Social Security payroll tax of 3.5 percentage points — half borne by employers and half by employees — is all that’s needed to keep full Social Security benefits flowing in the 2030s and beyond, Professor Munnell explained in a telephone conversation.”
You don’t have to increase the percentage with-held AT ALL.
The 12.4% payroll tax only applies to the first $168,600 of earned income.
Source: https://www.irs.gov/taxtopics/tc751
So what you do is eliminate that cap, like we ALREADY do for the Medicare tax.
In fact, if you removed the cap AND applied the tax to other forms of income, such as capital gains, we could probably reduce the percentage and bring in more money.