5.2: Revenue

Increase the amount of revenue raised from workers.

Other Information:

Social Security is primarily financed through a payroll tax of 12.4 percent. Employees pay half of the tax, and employers pay the other half. (The self-employed pay the entire 12.4 percent.) Under current law, the payroll tax only applies to a portion of earnings up to a "taxable maximum." In 2010, the first $106,800 of earnings is subject to the payroll tax. This results in higher-income earners facing a smaller payroll tax burden because all of their earnings above the taxable maximum are exempt from the tax. There are many approaches to increasing the total amount of revenue collected for the Social Security program. Some options include: raising the payroll tax from its current 12.4 percent (for example, increasing the payroll tax rate by 1 percentage point in 2012, 2 percentage points over the next 20 years, or 3 percentage points over the next 60 years), or increasing the taxable maximum beyond its current level.

Stakeholder(s):

• Workers

Indicator(s):

Indicator:1

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