How Income Inequality Undermines Social Security's Finances

By Daniel Marans

November 15, 2011 - 11:39am ET 

A recent study reveals how rising income inequality is jeopardizing Social Security’s finances.

It is by now common to hear Social Security advocates demand that we “scrap the cap” on earnings subject to the Social Security payroll tax.

This is an important appeal. Few Americans realize that millionaires only contribute to Social Security on the first $110,100 they earn. If they did, perhaps they’d be even more adamantly opposed to the benefit cuts many in Washington are proposing.