COUNTERPOINT: No to eliminating (or raising) the Social Security Tax

I oppose the proposed elimination in 2023 of the $160,200 cap on earnings subject to the payroll tax rate of 12.4 percent paid to Social Security.

Dating back to its original days in the Franklin Delano Roosevelt administration, Social Security has been designed with two goals in mind: (1) enable lower-wage workers, without access to insurance, pensions and retirement accounts, to prepare for retirement and insure against premature death and disability in a dignified manner, and (2) encourage labor effort, particularly at prime working ages. It does this by tying retirement, disability and survivor benefits to the individual’s lifetime earnings.

While there is some redistribution from higher-wage to lower-wage workers so that proportionately lower-wage workers get more from their taxes paid, Social Security is decidedly not a welfare program in design and in its official description. Eliminating the cap on earnings would further reduce the link between earnings and benefits. This would be politically harmful to the program and discourage work.