Fixing Social Security

In response to this op-ed column, I sent a letter to the L.A. Times last week (not published):

Andrew Biggs says, "A policy such as eliminating the $118,500 ceiling on wages subject to payroll taxes, a favorite of progressive advocates, would raise U.S. taxes to Scandinavian levels without fixing the long-term shortfall." He offers no explanation.

I strongly support eliminating that ceiling. Would Biggs or someone please explain why that wouldn't alleviate the shortfall?

After the letter didn't appear in the paper, I sent my question directly to Biggs, who did reply, saying

... eliminating the payroll tax ceiling would fix between 40-70% of the 75-year funding imbalance[, but] employers will “pay” the extra payroll tax by reducing wages for their employees [so that] less payroll is subject to federal income taxes, Medicare taxes and state income taxes. There’s also the way in which higher tax rates provide a disincentive to work....

I definitely still think such a simple fix for 40-70% of the 75-year problem is worth it. And if it helps decrease obscene wages and raises for the 1%, all the better!