[When Congress set the cap on Social Security contributions in
1983, they didn’t anticipate forty years of rising inequality. And
it’s cost us — a lot. ]
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INEQUALITY IS WEAKENING SOCIAL SECURITY. HERE’S HOW WE FIX THAT.  
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Linda Benesch
February 24, 2023
Inequality.org [[link removed]]

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_ When Congress set the cap on Social Security contributions in 1983,
they didn’t anticipate forty years of rising inequality. And it’s
cost us — a lot. _

, Getty Images

 

Is your salary less than $160,200? If so, you’re among the 94
percent
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of American workers who pay into Social Security all year long. But
there’s a privileged group that’s about to stop paying into Social
Security for the rest of 2023: People who make $1,000,000 a year.
Their last day of contributing to Social Security is February 28.

That’s not even the worst of it. Tucker Carlson, who makes a
reported
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$8 million a year, stopped contributing to Social Security on January
8. Joe Rogan, who reportedly
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a month, stopped contributing on January 2. Many billionaires receive
all of their money in the form of bonuses and stock options. Elon Musk
is the highest paid
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CEO in the world, but because none of it is wage income, he doesn’t
pay a single penny into Social Security.

Right-wing politicians and cable news pundits frequently say that we
“can’t afford” Social Security. Their solution? Cut benefits for
working people who’ve paid into the program for our entire lives.
They never suggest that we simply require the wealthiest people in
America to pay into Social Security all year long, just like the rest
of us. If we do, we can afford to not just protect but expand
benefits.

The Social Security Expansion Act
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recently introduced by Senators Bernie Sanders (I-VT) and Elizabeth
Warren (D-MA) along with its House counterpart, introduced by
Congresswomen Jan Schakowsky (D-IL) and Val Hoyle (D-OR), would do
just that. This legislation would require the wealthy to contribute
into Social Security on all their income over $250,000 — including
unearned investment income. It uses the additional revenue to increase
Social Security’s modest benefits and keep the program strong
through the end of the century and beyond.

Another piece of legislation, Social Security 2100: A Sacred Trust
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is sponsored by Rep. John Larson (D-CT). This bill, which also lifts
the cap on Social Security contributions and uses the revenue to
expand benefits, had the support of about 90 percent of House
Democrats in the last Congress. 

The movement to finally require the wealthy to pay into Social
Security all year long isn’t limited to Congress. President Joe
Biden campaigned [[link removed]] on lifting
the cap and using the revenue for targeted benefit expansions. Polling
shows
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that the idea has widespread support among the public, including 76
percent of all voters and 65 percent of Republican voters.

Unfortunately, Republican politicians are not listening to their
voters. The Republican Study Committee, a group that counts 156 House
Republicans as members, released a budget last year that would make
massive cuts
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to Social Security benefits, including raising the full retirement age
to 70. It does not lift the cap or otherwise raise a dime of
additional revenue from the wealthy.

Republican politicians are focused on protecting their wealthy donors,
who are paying less into Social Security than ever. The Economic
Policy Institute (EPI) recently found that
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as inequality increases, a record share of all earnings are above the
$160,200 cap on Social Security contributions.  

In 1983, the last time Congress made major reforms to Social Security,
they set the cap at a level that covered 90 percent of all wage
income, leaving only 10 percent above the cap. But they didn’t count
on the rising inequality of the last forty years. The percent of wage
income outside the cap has nearly doubled — in 2021, nearly 20
percent of wage income was outside the cap. And that doesn’t even
include unearned investment income, which accounts for the huge bulk
of the income of the wealthiest!

EPI estimates that income falling above the cap due to rising
inequality has cost the Social Security Trust Fund $1.4 trillion.
That’s a massive windfall for the wealthy  — and a massive loss
for our Social Security system and the millions of Americans who rely
on it.

Congress has the power to end this injustice. All it would take is
Republican politicians listening to their voters, joining with
Democrats to require the wealthy to pay into Social Security all year
long and on all of their income. If they do, millionaires won’t
exactly be celebrating next February 28 — but the rest of us will.

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Linda Benesch is the Communications Director at Social Security Works.
You can follow her on Twitter @LindaBenesch.

* Social Security; Income Distribution; The Social Security Expansion
Act;
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