"Everyone should pay into Social Security at the same rate" is the message that more than 120,000 Americans sent to Congress today as representatives from a number of national and regional organizations including SEIU, Social Security Works and the Center for Community Change delivered petitions demanding that our wealthiest citizens pay their fair share into Social Security.
Today's petition delivery was part of a national effort to strengthen Social Security for today's workers and future generations. April 17 marks the day that the 1% stop paying into Social Security because of the trust fund's tax cap. Once the payroll contribution cap of $117,000 is reached, millionaires and billionaires stop paying into the system, while the rest of us pay on all of our salary - all year long.
That's not right, nor is it reflective of Social Security's purpose. The Social Security Act was enacted August 14, 1935 in an effort to fight elder poverty among workers and to create a safety net for injured workers and disabled Americans as well as survivor's benefits.
But according to Reuters Columnist Mark Miller, this tax loophole dates back to 1977:
"The clear intent of Congress, expressed in 1977 revisions to the Social Security Act of 1935, is that 90 percent of all payroll covered by the Social Security system should be taxed. Under the law, the cap is adjusted annually to reflect wage inflation, but the flattening of wages for most Americans - and runaway income at the top - means that more income 'escapes' the cap."
While scrapping the cap on Social Security has been a topic of discussion for lawmakers and advocates, it's a message that often gets lost on Capitol Hill.
"It's time to cut the rhetoric that ignores the effectiveness of Social Security, which saves millions of our elders from poverty. Rhetoric will not strengthen Social Security or improve benefits for middle and low-income seniors who rely on it for the bulk of their retirement income. Congress should eliminate the cap on taxable income to accomplish both of these goals and ensure Social Security's solvency for future generations of Americans," said Eileen Kirlin, SEIU Executive Vice President.
Reuters' Miller says elimination of the cap also figures in a broader discussion about the looming retirement security crisis among middle- and lower-income households.
"Enhancing Social Security looks like the best solution to that problem."