LETTER: There’s a good reason for Social Security tax cap

In his August 19 letter, Randy Kornfield wishes that Social Security funding via FICA insurance premiums had no cap and applied to unearned income. But the reason for the status quo is simple: Social Security is not a generalized welfare program. The cap exists because Social Security benefits are also capped. This aligns with the program’s insurance-like structure, where benefits are tied to contributions, not need.

Mr. Kornfield goes on to assert that the existence of a cap on the insurance premiums is a benefit for high-income people at the expense of low-income people. The exact opposite is true: Each dollar contributed at the lower income levels buys a higher Social Security benefit.

Moreover, benefits are means-tested: Higher income recipients have their benefits “taxed away” — Uncle Sam giveth, and Uncle Sam taketh away. Lower-income people disproportionately benefit based on the dollar value of their benefits relative to the dollar value of their insurance premiums.