A six-figure limit on Social Security benefits?

Sometime around 2033 or 2034, SS benefits will drop by ca. 23% if nothing is done. 

One frequent proposal is to remove the cap on payroll taxes. There are at least two problems with this: (1) the wealthiest Americans derive most of their income from non-salary sources, and (2) this just turns SS into welfare, and we already know what Congress does with welfare. SS is retirement insurance paid for by workers. Let’s keep it that way.

Another proposal is to cap benefits:

 

“The very highest income couples can now collect $100,000 a year in Social Security benefits.”

That’s gross income, not net income. Couples making $100K/yr pay income taxes on 85% of that. They don’t pocket all $100K, and the more taxable income they have outside of SS, the more tax they pay on the SS income as that income puts them into a higher tax bracket. Furthermore, the Federal income taxes on SS benefits *don’t* go into the General Fund like the rest of federal income taxes. These funds are directed *entirely* into the SS and Medicare Trust Funds, where they help pay current and future benefits. The proposed caps of $50K on individual benefits and $100K on joint benefits isn’t such a big savings for SS when that trade-off is factored in.

A far more effective tool for SS sustainability would be to raise the payroll tax. 

https://www.crfb.org/sixfigurelimit?fbclid=IwY2xjawR4E-RleHRuA2FlbQIxMQBzcnRjBmFwcF9pZBAyMjIwMzkxNzg4MjAwODkyAAEeb4y0dVrIQBOJJpIfEAYyC73gcleHkYYuXZks8RStAhg7oMzjXKeX3JZiRqE_aem_srIgDmZLbYqwICreeLPeBQ

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