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Eight Reasons We Shouldn’t Raise the Cap on Social Security Taxes
The Center for American Progress has a new study arguing for raising the maximum earnings on which workers pay Social Security taxes. The limit is currently $118,500, and raising it would garner some substantial revenue to shore up Social Security. But there are a lot of reasons why it might not make sense at all. CAP’s argument is pretty much this: Since 1983, an increasing share of total earnings have “escaped” taxation by Social Security. In 1983, 90 percent of total earnings were subject to taxation. Today, only about 83 percent of earnings are taxed, meaning that 17 percent are “escaping.” From most progressives’ perspective, this pretty much settles the debate on whether we should raise – or preferably eliminate – the Social Security “tax max.” It’s by far progressives’ favorite solution to the Social Security funding problem and, for many of them, their only solution. But there are a whole bunch of other reasons we should think carefully before raising the tax max. Here are eight…Read More…
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