Removing the cap would represent the biggest tax hike in history. I doubt it will happen. The cap goes up every year now. It is now $106,500 up from $76,000 in 2000. Eliminating the cap on wages subject to the OASI payroll tax would generate only enough revenue to delay the date of the system's insolvency by a few years
Removing Social Security's Tax Cap on Wages Would Do More Harm Than Good
The “full retirement age” will be increased to age 70.
SS is a pay as you go system. The last time it went into the red, Congress passed P.L. 98-21, (H.R. 1900), which raised taxes and reduced benefits, including raising the age for full benefits from 65 to 67. The fix was supposed to make SS solvent for 75 years. By 2016, SS will be in the red again or just 33 years later.
Congress will just kick the can down the road again by making some fixes to keep the system running a little longer, e.g., change the COLA formula, make it a more means tested system, change the benefits calculations, etc. No matter what they do in this regard, the system is structurally unsound. It is unsustainable over the long term unless the system is changed. Personal accounts with a small defined benefit system is the way to go.
I believe I read this week that due to the economic down turn that the SS is in the red now. That is that SS is now paying out more than is coming in. They are actually cashing in some of the Treasury Certificates.
Yes, it will.
Taxes on the “rich” are more politically acceptable.
The earnings cap is almost certain to be removed, on all payroll taxes.