However, removing the cap would create the largest tax increase in U.S. history: $ 1.3 trillion over the first 10 years. Even increasing the cap to cover the first $150,000 of wages would amount to $384 billion in new taxes. It would give the United States one of the highest marginal tax rates in the industrialized world, with the potential for severely disrupting economic growth.
Yet in exchange for this massive tax increase, Social Security would gain only an additional seven years of cash‐flow solvency. In the end, proposals for changing the taxable wage cap are all pain and no gain. With a viable alternative—creating personal accounts—Congress should not go down this road.
