As many of our Illinois readers know, some of the benefits programs offered by the Social Security Administration are funded by payroll taxes from across the nation. But while the system is working, in theory, it’s hard not to notice that the programs are running short on money and relatively quickly.
Some politicians feel that this is because of the seemingly arbitrary payroll tax cap that only taxes the first $113,700 of a person’s income. Some politicians, as well as many people here in Illinois, have already begun questioning where this number came from and why something hasn’t been done to change the problem in the system.
Politicians like California Rep. Mike Honda who, in a recent interview, stated that he had yet to hear an explaination for why this particular cap existed. Many of our readers may be wondering the same thing and probably agree with his pleas to Congress to make changes to this cap. In the end, these changes could further ensure the safety net of that these programs off to people with disabilities as well as their dependents.
In order to provide more funding to programs like Supplemental Security Income and other federal programs such as Medicare and Medicaid, some members of Congress want to introduce the Strengthening Social Security Act of 2013. The new bill would scrap the current payroll tax cap in exchange for an updated one. Because of inflation and the strengthening of the U.S. dollar, the hope is that by increasing the tax cap, the change will also increase funding for these programs without having to go through a complicated overhaul of the system.
For many of our readers, this would be welcomes good news considering the concerns surrounding the depletion of the trust funds that supply benefits to programs like Social Security Disability and Supplemental Security Income. The hope now is that this is not just talk and that actions will finally be taken.
Source: The San Fancisco Gate, “Rep. Honda says it’s time to ‘scrap the cap’ on Social Security payroll tax,” Carla Marinucci, Aug. 7, 2013