The Social Security Cap

As you probably know, the quantity of a given person’s income that’s subject to Social Security taxes is “capped.” What’s less well understood is the fact highlighted by this chart from John Irons’ recent testimony (PDF), namely that trends in the US income distribution have meant that a higher and higher share of national income is escaping the Social Security system:

capcap 1

This on its own terms is good reason to think that the cap should be lifted.