YOUR MONEY

* The Social Security Act of 1935 set the taxable maximum at $3,000. Income earned above this amount was not subject to Social Security taxes. This threshold was a fixed amount that was not indexed for inflation or wage levels.[24]

* Between 1950 and 1971, various Congresses and Presidents passed six laws increasing the taxable maximum by a total of 200%.[25]

* In 1972 and 1973, the 92nd and 93rd Congresses and Republican President Richard Nixon passed laws:

• increasing the taxable maximum for 1973 and 1974 by a total of 47%.
• indexing the taxable maximum for 1975 and annually thereafter based upon changes in average wage levels.[26]

* In 1977, the 95th Congress and Democratic President Jimmy Carter passed a law increasing the taxable maximum faster than average wage levels in 1979, 1980, and 1981 by a total of 68%.[27] [28]