How many individuals will make $137,700 in 2020? This is the maximum amount of earnings subject to the Social Security tax for this year. This increase will impact about 12 percent of the 171 million workers who are covered under Social Security.
People who make over $137,700 are not subject to Social Security tax this year. Last year it was a $132,900.
The vast majority of working Americans, approximately 90 percent, will never know a year of life that they are not paying Social Security taxes. People who make more are spared paying the tax on income higher than the $137,700 cap. There is also a limit on how much they can collect in monthly Social Security benefits, which changes a bit each year. This year the max is $3,011 each month if you wait until your full retirement age.
The prediction is that Social Security will be out of money in 2035. Some argue that this won't happen. Some argue we need to increase the benefits age to 70 to secure continued funding. This simply means that millions of people who die young will never receive a cent of their Social Security benefits. There is also the argument that working people should start paying Social Security taxes on their benefits like health insurance and other fringe benefits. This would simply mean killing off what is left of the middle class and those barely making enough money now to survive.
It's time for Congress and our President to raise the cap on income subject to Social Security tax. For the next five years it needs to be increased to a million a year. The argument against this is that those who pay more will have to be compensated more in their monthly earnings because they have paid so much more into the fund. Do people who collect a million dollars a year or even a half million need to receive Social security compensation? They do not. Warren Buffet, Bill Gates and President Trump and a multitude of others do not need a Social Security pension.
The poor people of the country struggle as they look at their paychecks, decreased by tax dollars they need for the basic necessities of life. Congress doesn't worry about the impact that taxing the poor and the middle class has. Why is Congress so worried about taxing someone who makes a million dollars a year or more?
Congress should also cut out having to pay tax on Social Security income received by people over 75. Give the elderly a break. This only amounts to less than 3 percent of Social Security receipts and elderly Americans could convert the small increase into groceries. If someone is paying social security tax on a million dollars a year, they are simply doing what 99 percent of all the other Americans are doing.
The boost in income to the Social Security fund would strengthen the program and save Americans down the road from financial cuts that will only spiral them further into economic woes.
Dr. Glenn Mollette is a national columnist and president of the Newburgh Theological Seminary.