If you’re worried about whether Social Security can remain solvent over the next several decades, you should know about the legislative proposals that would guarantee the program’s solvency without raising taxes on anyone earning less than $400,000 per year.
As explained by Max Richtman, the chair of the National Committee to Protect Social Security & Medicare, under current law, payroll tax, which is how earners contribute to Social Security, is capped at $118,500. This means that someone who earns $118,500 this year will contribute the exact same amount of money to Social Security as someone who earns $18 million.
In 2012, Barack Obama proposed to reinstate payroll tax deductions on earnings above $250,000. According to Politifact, that campaign promise was not fulfilled. (http://www.politifact.com/truth-o-meter/promises/obameter/promise/44/lift-the-payroll-tax-cap-on-earnings-above-25000/)
Now, according to Richtman, there is a bill in Congress that would do what President Obama promised in 2012, but for earnings above $400,000. This bill would maintain the payroll tax cap—to protect the middle class—but would have payroll tax kick back in after earnings reached $400,000. That is, an earner would start paying payroll tax again on the 401,000th dollar of earnings and continue paying on every dollar earned after that.
Needless to say, as long as Republicans control Congress, this and similar proposals to preserve Social Security for generations without increasing the tax burden on the middle class will go nowhere.