That share of the tax falls on workers, too, in the form of reduced compensation, most economists agree. People who have retired since the mid-1980s, on average, paid more in taxes into Social Security than they will receive as benefits, when adjusted for inflation. Leaders largely silent A few lawmakers have been talking about payroll tax relief, but no one's doing anything about it. Republican constituencies tend to be affluent voters more concerned about taxes on their income, capital gains and estates. But Democrats and Republicans alike are loath to reduce those taxes for fear of hastening the insolvency of Social Security, which is expected to go broke by about 2030 unless major changes are made.
Retirees dominate the political debate.
Former Labor secretary Robert Reich says there is no public outcry about the issue in part because few people bother to add up their contributions and compare them with their income tax bill, which they have to calculate each year. Public awareness of the payroll tax is likely to grow next month. On Oct. 1, the Social Security Administration will begin mailing annual statements to workers 25 and older. For the first time, taxpayers will see exactly how much they have paid in taxes and what they will be getting in benefits. There is no income cap for Medicare.