While I have often criticized Congress for treating the Social Security Trust Fund like a piggy bank, I am perplexed by the consistent rumors on the internet that Congressmen don’t pay payroll taxes. Since 1984, Members of Congress have been required to pay into the Social Security Trust Fund. Currently, Members of Congress are paid $174,000 a year. They pay Social Security Withholding Taxes on the first $127,200 — just like other people. So the obvious next question is why do Members of Congress only pay Social Security Withholding Taxes on the first $127,200 of their income? The truth is that no one — including Bill Gates, Warren Buffet, and other billionaires — pays Social Security Withholding Taxes on income of above $127,700. Many people believe that results in a regressive tax and there are current proposals being considered by Congress to raise the limit on withholding but they haven’t gained popular support.
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