Background:
When you have wages or self-employment income that is covered by Social Security, you pay Social Security taxes each year up to a maximum amount that is set by law. That amount has changed frequently over the years. Currently in 2012 Social Security taxes are withheld from the first $110,100. Anyone earning more than that no longer pays into Social Security, nor does their employers. Each year the base increases.
Solution:
Removing the taxable earnings base could reduce or eliminate the long-term Social Security deficit. If the earnings base was completely eliminated for both employers and employees so that all earnings were taxed, all of the projected financial shortfall in the Social Security program could be eliminated.