Why is social security tax capped at $90,000?

[gLing]

Just to make sure I understand it correctly. Social security tax only applies to the first $90,000 you make each year. So if you earn $1 million a year only $90,000 of that is subject to social security tax. That means anybody making $90,000 or less has their entire income subject to such a tax?
What is the point of the cap? Why is this tax regressive?

 

[Peter Parka]

Sounds like a Conservative thing to me, come down on the poor and give the rich more benefits!:smiley24:

 

[gLing]

Sounds like a Conservative thing to me, come down on the poor and give the rich more benefits!:smiley24:

Well the rich do not collect social security.

 

[Peter Parka]

Don't know what it's like there but people on social security here don't pay tax. I'm talking about people on shitty minimum wage who have enough trouble getting by as it is!

 

[gLing]

Don't know what it's like there but people on social security here don't pay tax. I'm talking about people on shitty minimum wage who have enough trouble getting by as it is!

That is how it is here too. The lower incomes don't really pay any tax because of the EITC but the middle class gets stiffed with these payroll taxes such as social security. Now there is all kinds of crying that social security will run out of money so why the cap?

 

[Peter Parka]

That is how it is here too. The lower incomes don't really pay any tax because of the EITC but the middle class gets stiffed with these payroll taxes such as social security. Now there is all kinds of crying that social security will run out of money so why the cap?

Got to agree with you there! Once again, I don't know what it's like in the USA but this kind of stuff was going on under Maggie Thatcher's Conservative party in the 80s to pander to the rich people voting for her and keeping her in power. It let to riots and ultimately her being forced to resign.

 

[Pudding Time]

Well the rich do not collect social security.

So?..

 

[gLing]

So?..

And so? I don't understand your so.

 

[Pudding Time]

Who cares on average if the rich don't end up needing social security? They should still pay the same percentage as the rest of us.

 

[gLing]

Who cares on average if the rich don't end up needing social security? They should still pay the same percentage as the rest of us.

That is pretty much my argument. I don't think the SS tax should be regressive.