Earnings above this threshold are subject only to taxes meant to finance Medicare, which are smaller than the Social Security tax. • The Medicare and Social Security Fair Share Act would address this and would increase taxes for just 2 percent of Americans to improve the finances of these programs. [5]How the Medicare and Social Security Fair Share Act Would Change These TaxesThe Medicare and Social Security Fair Share Act introduced by Senator Sheldon Whitehouse would increase these taxes in several ways to ensure that well-off people pay a tax of 17.4 percent on their income to fund Medicare and Social Security, whether that income is earned or generated from investments. (For earned income, the 12.4 percent Social Security tax and the 5 percent Medicare tax would come to 17.4 percent.) The earnings cap applied to the Medicare tax as well until 1994 when Congress made all earnings subject to the Medicare tax.

Source: New York Times July 11, 2023 17:43 UTC