Quote:
Originally Posted by Jayhawk
The original Social Security contribution rate was 1% of pay, which was matched by employers. The tax rate grew to 1.5% in 1950 and gradually increased to top 5% by 1978. The current tax rate of 6.2% has been in effect since 1990. However, higher earners don't pay Social Security taxes on all of their income. The Social Security tax applied only to earnings of $3,000 or less in 1950 and earlier. The tax cap has increased over time to $51,300 in 1990 and $147,000 in 2022.
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I'd love to see the cap lowered to 5%, but the max income affected raised to $250,000 per person.
Consider also a few things:
1. In some states, state employees don't pay Social Security tax but instead get a pension. they aren't entitled to collect social security payments at all.
2. Immigrants who work, and are not yet full citizens, have to pay social security tax out of their paychecks, but are not permitted to collect social security payments when they retire.
3. Full time students under the age of 23 are exempt from income tax, and only have to kick in social security tax.
4. Many of the wealthier people in this country have so many tax shelters they never pay a dime toward social security - and generally don't collect any either. But they should still pay toward the pool - that's how it's able to sustain itself. If you're earning over a million bucks every YEAR - and can't manage to kick in 5% of the first $250k then you need a new accountant.