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]

HISTORY OF SOCIAL SECURITY

A major source of information for this research is the 2014 Social Security Trustees Report.[1] This report was published in July 2014 and uses data from 2013 as a baseline. Thus, unless otherwise stated, all future dollar figures are indexed for inflation to produce numbers that are consistent in terms of the years 2013/2014.

Whenever the word "projections" is used, this refers to projections made by the United States Social Security Administration. The process of making projections is not an exact science, and actual outcomes often differ from those predicted (see Accuracy of Projections). The Social Security Trustees Report contains high, low, and intermediate projections. Unless otherwise stated, the intermediate figures are cited because these "reflect the Trustees' best estimates of future experience."[2]