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Social Security Taxes to Rise for Higher-Income Americans

Higher-income workers will pay more in payroll taxes next year to support Social Security. social-security-2016Meanwhile retirees and other program beneficiaries see a scant increase in their monthly benefits.

Nearly 66 million people receive Social Security and Supplemental Security Income payments from the U.S. government.

According to the Social Security Administration, the maximum amount of earnings subject to the Social Security tax would climb 7.3% to $127,200 in 2017 from $118,500 in 2015 and 2016, affecting an estimated 12 million workers. The worker’s share of Social Security payroll tax is 6.2% of eligible wages; someone making at least $127,200 in 2017 would pay an additional $539 over the course of next year.

Employers also pay a 6.2% tax on eligible wages and would pay more, too, though economists generally believe those costs are borne by workers in the form of lower wages. Self-employed people pay the employer’s and employee’s share of the tax.

Original Story at WSJ.

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