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.
Recent trends suggest just the opposite.
The rich are paying a growing share of income taxes, thanks to hefty stock market profits. Rangel would use a portion of the payroll tax as a credit against income taxes. Kerrey and Texas Gov. George W. Bush would reduce the Social Security tax by 2 percentage points or so and give taxpayers the option of using that money to set up personal retirement accounts. A heavier burden Even staunch defenders of the current system concede that the payroll tax imposes a heavier burden on lower income groups than on the more affluent. But they also claim that low wage earners get better benefits relative to their contributions than do upper-income taxpayers.