Executives and other employees earning top dollar pull in more than a third of all US pay, the Wall Street Journal finds—and the ceiling on compensation subject to payroll taxes hasn’t risen enough accordingly, meaning the government isn’t bringing in what’s needed to plug ever-growing holes in the Social Security trust fund. Officials say the fund will run out in 2037.
A shrinking proportion of executive pay—83%, from 90% in 1982—is subject to payroll tax. The US forgoes a potential $115 billion yearly in revenue that could go to benefits for seniors. Officials say removing the ceiling on earnings subject to payroll tax could end the Social Security deficit for 75 years, but employers don’t want to see their payroll tax share increase.