“On Feb. 11, the top 1 percent of American workers finish paying their Social Security payroll taxes for the year. That’s because the maximum amount of annual earnings subject to the tax is capped at $118,500 (this level is adjusted for inflation each year). Yet most Americans don’t know that there is a Social Security payroll tax cap, because most don’t make enough money to ever hit it.
“What this means, though, is that those who make twice the cap — $237,000 per year — pay the tax on only half of their earnings, and those who make over $1.2 million pay the tax on only one-tenth. In other words, those who are lucky enough to make more than $118,500 per year pay a lower Social Security tax rate than the rest of us.”