Eliminate the FICA payroll cap? Not so fast!!
Among the numerous suggestions for “saving” Social Security from both sides of the Congressional aisle, one that seems to resonate most on the left side is to eliminate the earnings cap for the Social Security portion of the Federal Insurance Contributions Act, or “FICA” tax- an amount withheld from each and every one of your paychecks. While a small portion of FICA helps fund Medicare, the largest portion (6.2%) funds the Social Security program. The theory behind eliminating the tax cap (which for 2018 is $128,400) is that doing so would greatly improve the solvency of Social Security, but at what cost? In this Forbes article by Elizabeth Bauer, the author reveals that eliminating the payroll tax cap is little more than an effort at “wealth redistribution” by forcing higher-earning Americans to subsidize those with lower paychecks, a dynamic that could alter the very premise of the program as “insurance” versus welfare.
AMAC has been at the forefront trying to strengthen Social Security by developing and proposing its Social Security Guarantee. AMAC has been discussing and continues to discuss this common-sense solution with Congressional Representatives in its efforts to protect America’s senior citizens who rely on Social Security. To review AMAC’s Social Security Guarantee, click here.
To read the Forbes article by Elizabeth Bauer, click here.