Monday, April 25, 2011

More seriously: Social Security taxes

I have mentioned several times that part of any attempt to fix our fiscal problems should be raising the income level for which Social Security taxes are imposed. Right now that level is $106,800: that part of one's income (from wages) below that level is taxed at 6.2%, while the rest above that is tax-free (there is also a matching employer contribution).

This cutoff was created to "save Social Security" through the efforts of a bipartisan panel during the Reagan years. In those days, even under the conservative Ronald Reagan, it was possible to deal rationally with Republicans. Some of the history and reasons (e.g. income inequality) why that cutoff level is no longer sufficient is presented in this week's GoozNews: it's worth reading.

1 comment:

  1. If I am forced to put more into Social Security, isn't it fair that I get more in benefits when I retire?