Removing the Payroll Tax Cap

In 2010, Social Security paid out more in benefits than it received in revenue from the payroll tax. This shortfall happened seven years before it was supposed to, and the Congressional Budget Office projects shortfalls from now on out.One idea for making up for these shortfalls is to remove the cap on the income that is hit by the payroll tax. Currently, that cap is $106,800 on earned income, i.e., wages. Of all the ideas for reforming Social Security, removing the cap is the worst.The main argument against removing the cap is that America simply can't afford it. Unless the Fed's quantitative easing is to be a permanent program, there'll only so much money out there, so the feds should cut spending on everything, including entitlements. But Ezra Klein of The Washington Post actually proposes expanding Social Security, and Christian Weller of Center for American Progress has even more ambitious plans for "strengthening"  the system. Both proposals require more money and...(Read Full Post)