October 18, 2021

Analysis Illustrates How Eliminating the Payroll Tax Cap Could Substantially Improve Social Security’s Future

The 2021 Social Security Trustees Report states that the Trust Fund can pay full benefits through 2033, and a new Center for Economic and Policy Research (CEPR) analysis lays out several options for ensuring that all beneficiaries receive full benefits beyond that date.

The analysis outlines small changes that would make the Social Security Trust Fund 100% solvent for the next several decades and illustrates the effect of income inequality on its long-term solvency.

In 1983 only 10% of all income earned in the United States was not subject to the payroll tax. That percentage is expected to grow to 18% over the next decade. In 2022, individuals with incomes above $147,000 will not be required to pay the Social Security withholding.

“The cap needs to be eliminated for people making more than $400,000 annually to keep the wealthiest Americans from paying an even smaller percentage of their income into Social Security over time,” said Robert Roach, Jr., President of the Alliance.