Social Security Reform & the Continuing Debate on the Taxable Cap
There are always two sides to a story, and that’s certainly the case with respect to the argument for removing the cap on earnings subject to Social Security tax. In 2018, this cap will reach the $128,700 level, meaning that earnings beyond that point are not subject to the 6.2% FICA tax (12.4% if you’re self employed). One side of the argument, of course, is that those earning above the cap can afford the extra tax on their above-the-cap earnings, while the other side of the argument points out that Social Security’s maximum payouts are also capped, meaning the additional tax would not produce commensurate increases in the benefits. It’s an interesting argument that will continue to surface in the months ahead as the subject of Social Security Reform winds it’s way through Congress. The Motley Fool’s Sean Williams provides some thoughts on the issue in a post on www.fool.com. Check it out here…
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