3. More of Your Income Gets Taxed
High earners, this one’s yours. Social Security only taxes income up to a certain cap, and that cap goes up most years. In 2025, it’s $176,100.
What that means: if you earn $200,000, only the first $176,100 gets hit with Social Security payroll tax (6.2% from you, 6.2% from your employer, or the full 12.4% if you’re self-employed). Anything over that isn’t taxed for Social Security.
For workers, this might feel like one more bite out of the paycheck. For retirees looking at the system’s long-term health, though, raising the taxable wage base helps funnel more money into the program. And given how many people depend on Social Security, that’s a good thing.
