Latest / The Fiscal Policy Podcast with Fexingo: Government Budgets, Stimulus, and Public Spending
How Payroll Taxes Fund Social Security
We break down the mechanics of FICA and why the payroll tax cap creates a structural revenue gap for Social Security. Lucas walks through the $168,600 wage base limit for 2024 and what happens when earnings exceed that threshold. Luna asks how this impacts high earners versus the broader workforce. We look at the historical context of the cap's introduction in 1983 and project its impact on the trust fund solvency timeline through 2035. This episode focuses on the specific arithmetic of payroll taxes rather than broad political debates about privatization.
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The skinny
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