One way to fix Social Security’s long-term financing is to stop exempting high-earning workers from Social Security taxes on the majority of their income. Thanks to new research from the Center for Economic and Policy Research (CEPR), we now know just who would be affected by the elimination of that exemption: less than 6 percent of all workers.
Current tax laws exempt every dollar a person earns above $117,000 from payroll taxes to finance Social Security. That cap means that the 900 richest people in the country stopped paying into the program after the first two days of 2014. Those most able to chip into the country’s retirement security system won’t do so again until the calendar flips to 2015. As CEPR notes, the cap means that “workers who make $117,000 or less per year pay a higher Social Security payroll tax rate than those who make more.”