The Economic Opportunity Institute, a partner of EPI’s Economic Analysis and Research Network (EARN), and Social Security Works-Washington have a catchy new slogan on the future of Social Security: “Just scrap the cap.”
Hoping to spread their message, EOI and SSWW produced a hilarious but poignant music video featuring seniors rapping about moving in with their son because their Social Security benefits were cut. Both of the lead actors are union activists and somehow maintain a straight face throughout the video.
“Just scrap the cap” refers to the groups’ preferred policy of subjecting all workers’ earnings to Social Security taxes. Currently, the “earnings cap” is $106,800 , meaning that workers who earn more than this face a tax rate of zero on each dollar over the cap. And this cap rises only at the rate of average wage growth in the economy; given that earnings at the top of the distribution have risen much faster than this overall average for decades, this means that a rising share of economy-wide earnings spills over the cap, reducing the tax-base for Social Security.