Scrap the Cap
Editor’s note: Bridget Rittman-Tune is one of CHN’s Spring 2019 interns.
Every February since 1983 has contained two Valentine’s Days for millionaires. On the first Valentine’s Day they buy chocolate, and the second they pay Social Security tax for the last time that year. Today, February 18th, is the last day a millionaire has to pay Social Security taxes this year, while the vast majority of Americans will continue to be taxed for the entirety of the year. This is because, in 1983, total earnings that are subject to Social Security payroll tax dropped from 90 to 83.4 percent. For 2019, the cap on maximum wage earnings subject to the payroll tax is $132,900.
This is why the annual Scrap the Cap Day on February 13 was a perfect time for Senators Bernie Sanders, Cory Booker, Kirsten Gillibrand, and Kamala Harris and Representative Peter DeFazio to reintroduce the Social Security Expansion Act. This act would subject all income, including unearned income, over $250,000 to the Social Security payroll tax.
On my second day as a CHN intern I was lucky enough to go the Scrap the Cap Day: Expand Social Security Benefits event hosted by Senator Bernie Sanders. Along with Senator Sanders introducing the Social Security Expansion Act, Senators Gillibrand and Booker and Representative DeFazio also spoke about the huge tax inequality that profits the rich, while hurting middle- and low-income Americans. One of the main focus points was on the expenses and needs of Americans who are eligible and need Social Security for basic necessities like food, medicine, and housing.
At the Scrap the Cap Day event, Senator Gillibrand said that the “most important thing you can do is make sure everyone invests their money into Social Security, making sure you don’t get a preference for ownership as opposed to work.” Why should those who make less carry a larger Social Security tax burden? Being able to retire and live with dignity shouldn’t be a luxury and yet many citizens over the age of 65 are forced to choose between either paying rent or buying food. This country asks that everyone work hard and in return they will get the American dream. So, why are so many people who work their whole lives not able to then cover basic needs once they have put in their time?
Our political system needs to stop asking for everything from middle- and low-income Americans and next to nothing from the rich and elite. As Senator Booker put it, “the cap constitutes a regressive, backwards, unfair limit on our ability to create a system that supports us all.” To stand united we must start taking equal shares from the rich and stop giving nothing to the poor and elderly.
More information on the Social Security payroll tax cap, and what modifying it will do, can be found from the Center for Economic and Policy Research here.