There’s a quick and easy fix to Social Security solvency

Here’s one quick and easy way to solve Social Security’s solvency issues:

By fighting to restore and improve Social Security, we kill three birds with one stone–solidifying Social Security’s funding, improving life for retirees, and helping open up jobs for younger workers.

How to perform this triple miracle?

Easy. Just eliminate the cap on income subject to the FICA Social Security tax (currently set at just the first $106,800 of wages or net income from a business or profession), and end the exclusion of investment income, so that people who earn their money by sitting on their butts trading stocks at home or by sitting in fancy offices buying and selling companies, pay Social Security taxes on their profits, and bingo, there’s no more risk of burning through the Trust Fund during the wave of Baby Boom retirees. (A Senate report found that by just taxing all earned income, the Social Security Trust Fund would be flush indefinitely, right through the Baby Boom retirement era, but Congress didn’t even look at what happens if we also applied the FICA tax to investment income.)

If an individual – or a family – making $106,800 or less has to pay FICA taxes on 100% of their income, then it fails to register for me why an individual or family making more than $106,800 shouldn’t pay FICA taxes on the same percentage of their income.