Raising the ceiling on payroll taxes has many benefits.  First, it sets a floor on taxes for everyone.  Right now the marginal rate on income just above $100 K (and practically speaking, at all incomes above $100 K) is much smaller than the marginal rate just below $100 K, which is extraordinarily unjust.  By setting the payroll tax as the floor for everyone, there is no point at which the marginal rate drops like this.

Second, as it is demonstrated that those with a lower income CAN pay this tax, there is no reason to believe those with higher income cannot pay it.

Third, payroll tax has no complicated set of exemptions, deductions, etc, so everyone pays the full amount.

Fourth, the folks with the higher incomes HAVE THE MONEY, it is stupid to try to tax those without the money to pay for government.  If you look backwards across history, our taxation always fell on those WITH the money, it is only in the recent past that taxation has fallen principally on those WITHOUT money.

Fifth, they are the principal beneficiaries of government.  Poor people cannot even use banks, they go to usurous check cashing businesses to cash their checks.  The middle class does better than that, but do you really think they are the primary beneficiaries of institutions such as the SEC?  So much of what we pay for, including payment on the national debt - which is, to the degree that it is paid to wealthy Americans, simply a reimbursement of taxes with interest to people who should have had higher taxes in the first place - primarily benefits the wealthy.  If the military is protecting your homeland where you own a $100 to $200 K home and it is protecting the homeland of some wealthy person who owns 3 or 4 multi-million $ mansions, they are getting a lot more benefit out of the military.  If the government protects your $10,000 in bank accounts and $150,000 in retirement and it protects their $50 million in securities, THEY are getting a lot more benefit out of government.  So they should pay for the benefit.  Uncapped payroll taxes guarantees this.

Sixth, the higher payroll taxes as raised in the 1980s paid for the income tax reductions that allowed the growing disparity between rich and poor today.  The obvious way to correct this regressive tax policy is to apply that payroll tax policy to those who are at the top.

I appreciate your comments.

I spent more than 20 years working for a means tested program, including five on the front line as an eligibility worker and some years after that reviewing those decisions.  I consider means testing to be inherently dehumanizing both for the applicant and the employee, and thus I completely oppose means testing. I encourage you to go with someone to apply for Medicaid, Food Stamps, TANF, or some other "welfare" benefit and see what this experience is like.  While I do not assert that evil people created this process, it would be evil to creat it once again.

Further, I consider it entirely a matter of tax policy that there might be any question whether Social Security is able to pay its promised benefits in perpetuity.  For the vast population Social Security is part of their retirement plan.  Most fixed benefit plans originating in earlier times explicitly took SS benefits into account when setting benefit levels.  I have no faith that federal policy related to means testing would keep the benefit level at such a level as to retain the entirely justified quality of life expectation of more than a hundred million Americans.  Social Security is not a safety net, it is part of the retirement planning that most Americans rely on.

The change in tax policy I have suggested would entirely eliminate this question of funding Social Security and would create bountiful surpluses adequate to pay for universal health care as well as meet other demands for public goods.  It is outrageous that the relatively poor pay payroll taxes at a higher rate than the wealthy and that those who derive their income from investments, including those who are able to designate whether income is "earned" or "investment," avoid paying payroll taxes altogether.

Thank you.  I have addressed the FICA regressive tax issue at the cross post.  While it is not a perfect solution, by setting FICA as a floor tax on all income of all sorts and at all levels, one substantially reduces the regressiveness of the whole tax system while at the same time producing substantial revenue for important public programs.  As I note there, those who pay FICA with income around $100 K are paying a marginal rate of 40 to 43 %, and those with substantially more income have a maximum marginal rate of 35%.  This is outrageous.

I believe in Canuckistanadaburg it is called universal old age pensions.