Millionaires Have Already Paid Their Fair Share of Social Security: Report

Meanwhile, think tanks spar over whether eliminating the payroll tax cap on high earners would strengthen Social Security finances or transform the program into a more redistributive system.

John Rigolizzo

Published: 3/13/2026, 4:47:50 AM EDT

Millionaires Have Already Paid Their Fair Share of Social Security: Report — Social Security cards and a W2 wage form in a stock photo. (Shutterstock)

If you're a millionaire, you have likely already paid your share of Social Security.

According to a report from the left-leaning Center for Economic and Policy Research (CEPR), because of Social Security's taxable income cap, people with incomes of $1 million finished paying their contributions by March 9. The center has pushed for an increase in the income cap to help offset the Social Security Administration's liquidity issues, but conservative think tanks caution against it.

Social Security imposes a 6.2 percent tax on payroll income. But taxable income is capped at $184,500. As of March 9, anyone whose wage or salary income totals $1 million has earned that much in income.

The income cap is a fixture of Social Security's distribution structure.

A common misconception is that Social Security is essentially personal employment insurance mandated and backed by the federal government. But in fact, it comes from a pool of funds collected from all workers across the United States, with a specific schedule of benefits based on income and requirements for how to receive them.

It is also tiered so that lower-income earners receive a higher percentage of their lifetime earnings than high-income earners: Social Security replaces up to 78 percent of lifetime average wages for low-income earners, 42 percent for middle-income earners, and 28 percent for high-income earners.

But the Social Security Trust Fund is still just a few years away from insolvency. By its own internal estimates, the Social Security Administration states that the Social Security Trust Fund will be depleted by 2034. Without the money from the trust funds—and assuming Congress does not take any legislative action to ensure solvency—the Social Security Administration will have to rely solely on payroll taxes; it will be able to pay only about 80 percent of scheduled benefits.

CEPR rejects several of the more obvious proposals to ensure solvency, including privatizing Social Security and raising the retirement age, saying they would disproportionately benefit higher earners.

"Both types of proposals ignore the simple solution that is most consistent with the public spirit of this public program: making everyone pay their fair share by eliminating the payroll tax cap," the report states.

But the conservative Manhattan Institute points out that the proposal has a number of key drawbacks. First, removing the cap on taxable earnings would also remove the cap on benefits for high-income people. Even if they remove the tax cap by itself, the program would start to resemble a downward-redistributionist welfare system that was too unpopular even for the authors of the New Deal; moreover, the savings would be minimal.

Second, it would not bring permanent solvency. The report says that raising the cap would still put it short of Social Security's share of GDP. Moreover, it would only balance the books until 2029, at which point it would fall back into a deficit; and push back insolvency to 2055.

Furthermore, raising the tax rate when marginal tax rates are already so high for high-income Americans would severely limit further opportunities to raise taxes on wealthy Americans.

Finally, current retirees—Baby Boomers in particular—are the wealthiest generation in American history, including the workers who pay their benefits.

"No single policy—including lifting the Social Security tax cap—can fix the entire shortfall without the need for other savings proposals," the institute said. "Generational equity requires scaling back the unaffordable promises made to current and future retirees, rather than maxing out the taxes on working families.