Here's How Higher Earners Get a Major Break on Social Security Taxes
Though Social Security serves as a critical income source for millions of retired seniors, you'll often hear that some aspects of the program are downright unfair. One such example is the way workers pay into the program. Critics of the current system have long argued that the rich don't pay their fair share of Social Security taxes. Are they right?
Social Security gets the bulk of its revenue from payroll taxes, but those taxes don't apply to all wages. There's an earnings cap established each year that determines what level of wages workers pay taxes on.
In 2020, that limit is $137,700. In 2021, it will increase modestly to $142,800. But beyond that point, higher earners are off the hook on paying taxes into Social Security.
Source Fool.com
