Most workers pay the 6.2 percent Social Security tax all year long, but the very rich get a tax break. Wage income above $118,500 annually is not subject to Social Security tax. This means that someone earning $1 million per year only paid into Social Security for the first 44 days of the year, through February 13. Starting on Valentine’s Day, these super-rich earners paid no Social Security tax, meaning they have a lower effective tax rate.
Senator and Presidential candidate Bernie Sanders has proposed scrapping the cap on taxable earnings. The Social Security system is currently in good financial health, with a $2.8 trillion surplus and the ability to pay every penny in benefits for the next 18 years. However, by removing the cap on taxable income, we can make Social Security solvent for the next 50 years, and expand benefits to help seniors and people with disabilities.