In 2025, the Social Security tax cap will increase to $176,100 from $168,600. While this may seem like a step toward strengthening the program, the increase is modest and doesn’t address a core issue. Higher earners still aren’t paying proportionally into Social Security.
The tax cap sets a limit on how much income is subject to Social Security taxes. This means that once someone earns beyond $176,100, their additional income is not taxed for Social Security.
This leaves a significant portion of wealthy individuals’ earnings untaxed, which reduces potential funding for the program. With Social Security facing long-term funding challenges, this low cap increase raises concerns about fairness and sustainability.
Asking higher earners to contribute more could help keep the system stable for future generations, ensuring that the program remains a reliable safety net for all who depend on it.
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