Social Security: Cut Taxes in Half

"Bethke shows how we can cut Social Security taxes in HALF and still fund it for 75+ years — but Wall Street hates it because their free ride is over."

The Simple Fix: Kill the Cap

Today: FICA applies only up to ~$168k (2024), then stops. A billionaire pays the same FICA dollars as a surgeon.

Fix: Apply FICA to all labor income, no ceiling. Effect: ~90-95% of the program's long-term funding gap closes instantly.

The Nuclear Option: Tax All Income

What if FICA applied to ALL flavors of income - wages, dividends, capital gains, pass-through profits?

• Current FICA base: ~$10-11T in capped wages
• Comprehensive income base: ~$20-22T
• Tax base roughly doubles

Result: To get the same revenue, you'd only need ~6.0-6.5% total (down from 12.4%). Median households see effective FICA burden fall in half.

The "$0 Salary" Dodge

Guys like Musk or Trump famously pay themselves $0 wages. On paper: no wages → no FICA. How do they live large?

• Loans against assets: Pledge stock, borrow millions, live off borrowed cash. Loans aren't taxable income.
• Capital appreciation: Stock grows untaxed until sold. Never sold = never taxed.
• Step-up basis at death: Heirs reset tax basis. Appreciation untaxed forever.

The tax system is labor-heavy, capital-light. W-2 wages get hammered; appreciation and loans escape. The state props up this arbitrage.

Closing the Loopholes

• Apply FICA-equivalent to all income (dividends, cap gains, pass-through)
• Treat loans against assets as "deemed realization" above threshold
• Kill step-up basis - heirs pay cap gains on inherited appreciation
• Enforce "reasonable comp" on closely held corps

One-Time Catch-Up Option

5-7 year lookback on above-cap wages. Short, clean, fills the hole. Combined with no-cap going forward, you've over-solved the actuarial gap.

The Result

• Social Security: boringly solvent for 75+ years
• Median workers: FICA burden cut in half
• High earners and capital-income households: shoulder more (finally)
• The system actually becomes flat - everyone pays the same % of total income

This is still free market. We're removing an arbitrary carve-out that benefits only the highest earners.