Bloomberg Tax: “Social Security, one of the most successful anti-poverty programs in US history, faces a funding crisis by 2035. Raising taxes on upper-income earners and including investment income in the taxable base for Social Security would be practical and politically plausible solutions ahead of this deadline. The economic stability offered by the Social Security program shouldn’t be imperiled simply because the threat is a decade away. The looming shortfall demands urgent action, and taking steps sooner to increase funding would pay dividends for future generations of retirees and people with disabilities. The incoming Trump administration and Republican-led Congress ran on a broadly pro-Social Security platform, vowing to protect benefits. These commitments may suggest a political appetite for reforms to secure Social Security’s future. There are two effective and politically achievable solutions to the funding crisis: raising the cap on taxable income and expanding the Social Security tax base to include investment income. Eliminating the taxable income cap is one of the simplest and most effective ways to immediately bolster Social Security revenue. As of 2024, the cap is set at $168,600, which means any income earned above that amount is exempt from Social Security taxes. Social Security isn’t just a lifeline for individual retirees and people with disabilities—it’s also a cornerstone of collective economic stability. The concept of an income cap undermines this principle, as it implies that some incomes are exempt from the shared responsibility of sustaining a social safety net. Removing the cap would reflect the truth that Social Security is a societal contract. For a worker earning below the $168,600 threshold, 6.2% of wages are taxed for Social Security, matched by an equal contribution from their employer for a total of 12.4%. But higher earners, whose incomes may far exceed the cap, pay a disproportionately smaller share relative to their total earnings—making the tax itself regressive…”