However, a deduction is allowed for an amount equal to one-half of the combined self-employment social security and Medicare hospital insurance taxes that are imposed. Finally, if you are married and file a separate tax return, you probably will pay taxes on your benefits. If you are the recipient of Social Security benefits, every January you will receive a Form SSA-1099, Social Security benefit statement.
But the SSA data used in this piece allow us to look within the top 10%, specifically within the top 5% and even 1% of earnings. The SSA data measure annual earnings (hourly earnings cannot currently be calculated from the SSA public data). The SSA data also include some wage and salary income not captured by the CPS—stock options and bonus pay, most importantly. Annual earnings compression does not seem to be happening much between the top 5% and everybody else. Significant reforms to Social Security made in 1983 set the cap at a level so that 90% of all earnings would be subject to taxes. Over time, rising inequality meant that this share shrank as more earnings for higher-wage workers spilled over the cap.
