By JLP | November 30, 2011
In 2012, the amount of income subject to social security taxes (confiscation) is going up to $110,100 from $106,800 (the wage base for 2009 – 2011). This means the maximum social security tax will now be $6,826.20 ($13,652.40 when you include the employer’s portion). Take a look at these two graphs I put together to see just how quickly the maximum tax and the amount of income subject to the tax have increased since 1965. It’s not a pretty picture (and it’s only going to get worse).
All of this wouldn’t bother me so much if…
1. We didn’t have to pay income tax on the amount confiscated.
2. I could plan on getting our share back when we retire. It’s doubtful that’s going to happen. What is there will get taxed away because we have managed to save on our own.
NOTE: While researching this post, I tried to find a history of the maximum social security payment amounts but came up empty. Do any of you know where I can find this information?