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How Income Inequality is Effecting Social Security
Social Security can currently pay off ¾ of benefits. This is attributed to its solvency issue and is one of the main arguments for getting it fixed and stabilized. One reason that some experts believe why this happened is because of the growing rate of income inequality among workers in the U.S. Most growth in wages has gone to the highest earners for the past few decades, creating a larger and larger gap and shrinking the middle class. How this affects the solvency debate is that not all income is taxed evenly for Social Security, there is a cap on taxable income. This cap is currently set at $118,500, meaning that anything earned over that amount is not taxed any further for Social Security. For more information, visit this article by Teresa Ghilarducci with The Atlantic.
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