Alert
Close

Help hungry seniors. Deliver help and hope before Thanksgiving. Donate

Highlights

Close

You and Your Town Contest-You could win an AARP RealPad
Introducing RealPad by AARP
AARP Auto Buying Program

AARP-iPad-ePub-app

Most Popular
ARTICLES

Viewed

Free Fun!

AARP Games - Play Now!

Work
PROGRAMS

Best Employers for Workers Over 50

See the latest winners of this AARP recognition program.

Employer Resource Center

Attract and retain top talent in a changing workforce.

You've Earned a Say

The Future of Social Security: 12 Proposals You Should Know About

Pros and cons of options on the table in Washington

Eliminate the Payroll Tax Cap

The Social Security payroll tax currently applies to annual earnings up to $110,100. Any wages earned above $110,100 go untaxed for Social Security. This cap generally increases every year with increases in the national average wage. Today, the cap covers about 84 percent of total earnings. Eliminating the cap so that all earnings would be subject to Social Security’s payroll tax would help close the program’s funding gap. If your income is under $110,100, you would see no change.  If you make above that amount, you (as well as your employer) would pay the 6.2 percent payroll tax on your remaining wages. If all earnings were immediately subject to the Social Security tax, the new revenue is estimated to fill 86 percent of the funding gap.

PRO: Eliminating the tax cap would make Social Security’s financing more fair. Only 6 percent of workers earn more than the current cap of $110,100. They would pay on all their earnings throughout the year just as everyone else does, and would get a modest increase in benefits. This change alone would just about eliminate Social Security’s long-term financing gap. Combining this with other changes could wipe out the gap and pay for needed benefit improvements. (Virginia Reno, National Academy of Social Insurance)

CON: At first blush, the idea that people should pay Social Security taxes on all of their earnings seems both fair and attractive. However, this “solution” would cause huge Social Security checks for very high-income people.  If millionaires pay Social Security taxes on all of their salary income, the maximum annual benefit payment could reach over $150,000 a year. This development would not bankrupt the program, but it would change its nature. Social Security was not intended to provide such large benefits. (David John, Heritage Foundation)

Jobs You Might Like

Discounts & Benefits

From companies that meet the high standards of service and quality set by AARP.

UPS Store membership discount aarp benefits

Members save 15% on eligible products/services, 5% on UPS shipping at The UPS Store®.

membership adt

Small business owners save 20% on new installation of any new ADT security system.

Mujer en la parte de afuera de so negocio

Free quotes for members from the AARP® Small Business Insurance Program.

Member Benefits

Renew today! Members receive exclusive member benefits & affect social change.

Rewards for Good

Your Points Balance:

Learn More

Earn points for completing free online activities designed to enrich your life.

Find more ways to earn points

Redeem your points to save on merchandise, travel, and more.

Find more ways to redeem points

Explore Your Learning Possiblities