The rich pay less of their income for similar or greater benefits.
There is a consensus that Social Security is not sustainable at current contribution and benefit levels beyond 2035. If no changes are made, the system will be able to pay only 80% of its obligations after that date and will decline more in future years. Some have proposed that benefits be reduced before that time. This is despite the fact that most people pay into it for all of their working lives and therefore have earned the payments in retirement.
On the other hand, not everybody pays their fair share. People who earn more than $160,200 don’t pay anything for wages over that amount. This cap leaves a growing share of wages outside the taxable base. A better way to put Social Security on solid financial footing is to raise or eliminate this cap.
As currently structured, the Social Security tax is regressive; those who can least afford it pay the largest share of their income in tax. In essence, the rich pay less of their income for similar or greater benefits. If anything, it should be the other way around, with people at higher income levels paying more.
The very wealthy currently benefit in another way. They rely mostly on their investment income, which is not subject to the Social Security tax. This unfairness needs to change. If Congress will address these issues, Social Security can be sustainable for decades and our growing inequality gap can be reduced.If you purchase a product or register for an account through one of the links on our site, we may receive compensation.
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