•Press Release Health and Social Programs Inequality
Washington DC — The burden of supporting Social Security falls more heavily on those who make less. That is never more apparent than today, when wage earners making over $142,800 go over the top of the contribution cap and stop paying contributions for the year. To illustrate that point, the Center for Economic and Policy Research (CEPR) put together this handy online calculator.
“The current payroll tax is not even one percent of a millionaire’s wage income,” said CEPR Program Associate Sarah Rawlins. In this article, she explains how the calculator allows you to see for yourself when people with various wage incomes stop paying into Social Security.
Wage and salary growth at the top of the earnings distribution has significantly outpaced that at the bottom and middle, resulting in decades of unabated upward redistribution of income. Scrapping the cap would make everyone pay the same 6.2 percent tax rate. Combined with modest changes to the program, Social Security’s projected shortfall could be erased and allow for expanding benefits.