The Evolution of Social Security's Taxable Maximum

by Kevin Whitman and Dave Shoffner
Policy Brief No. 2011-02 (released September 2011)
Table equivalent for Chart 1. Nominal, inflation-adjusted, and wage-indexed tax max values, 1937–2009 (in dollars)
Year Tax max values
Nominal Inflation adjusted to 2009 dollars Wage indexed to 2009 dollars
1937 3,000 43,670 107,330
1938 3,000 44,290 115,960
1939 3,000 44,920 106,910
1940 3,000 44,600 102,200
1941 3,000 42,490 95,710
1942 3,000 38,350 83,980
1943 3,000 36,140 71,280
1944 3,000 35,530 63,080
1945 3,000 34,750 60,420
1946 3,000 32,090 64,560
1947 3,000 27,950 56,150
1948 3,000 25,990 51,720
1949 3,000 26,200 49,180
1950 3,000 25,990 48,010
1951 3,600 28,910 52,360
1952 3,600 28,260 49,290
1953 3,600 28,050 46,680
1954 3,600 27,950 46,440
1955 4,200 32,730 51,790
1956 4,200 32,250 48,410
1957 4,200 31,110 46,950
1958 4,200 30,260 46,540
1959 4,800 34,340 50,680
1960 4,800 33,770 48,770
1961 4,800 33,430 47,820
1962 4,800 33,100 45,540
1963 4,800 32,670 44,450
1964 4,800 32,250 42,700
1965 4,800 31,740 41,950
1966 6,600 42,440 54,410
1967 6,600 41,180 51,540
1968 7,800 46,720 56,990
1969 7,800 44,310 53,880
1970 7,800 41,930 51,330
1971 7,800 40,170 48,880
1972 9,000 44,810 51,360
1973 10,800 50,650 58,000
1974 13,200 55,790 66,920
1975 14,100 54,640 66,510
1976 15,300 56,070 67,510
1977 16,500 56,800 68,690
1978 17,700 56,560 68,260
1979 22,900 65,670 81,210
1980 25,900 65,490 84,260
1981 29,700 68,120 87,790
1982 32,400 70,090 90,770
1983 35,700 74,990 95,370
1984 37,800 76,710 95,380
1985 39,600 77,660 95,830
1986 42,000 81,070 98,710
1987 43,800 81,620 96,770
1988 45,000 80,630 94,760
1989 48,000 82,070 97,220
1990 51,300 83,360 99,320
1991 53,400 83,350 99,670
1992 55,500 84,190 98,520
1993 57,600 84,970 101,370
1994 60,600 87,250 103,860
1995 61,200 85,640 100,850
1996 62,700 85,290 98,500
1997 65,400 86,990 97,080
1998 68,400 89,790 96,480
1999 72,600 93,250 97,000
2000 76,200 94,580 96,480
2001 80,400 97,140 99,420
2002 84,900 101,180 103,950
2003 87,000 101,430 103,980
2004 87,900 99,870 100,380
2005 90,000 98,780 99,150
2006 94,200 100,190 99,220
2007 97,500 100,800 98,240
2008 102,000 101,310 100,460
2009 106,800 106,800 106,800
SOURCE: Authors' calculations based on SSA (2010a, 2010b, 2010c) and BLS (no date).
Table equivalent for Chart 2. Percentage of covered workers whose earnings exceed the tax max, 1937–2009
Year Percentage
1937 3.13
1940 3.38
1945 13.71
1950 28.86
1951 24.55
1952 27.87
1953 31.25
1954 31.65
1955 25.62
1956 28.45
1957 29.88
1958 30.57
1959 26.66
1960 28.00
1961 29.20
1962 31.17
1963 32.53
1964 34.50
1965 36.11
1966 24.23
1967 26.36
1968 21.39
1969 24.52
1970 26.02
1971 28.29
1972 25.01
1973 20.28
1974 15.11
1975 15.04
1976 14.94
1977 14.84
1978 15.42
1979 9.97
1980 8.76
1981 7.61
1982 7.09
1983 6.28
1984 6.38
1985 6.48
1986 6.20
1987 6.16
1988 6.55
1989 6.16
1990 5.67
1991 5.63
1992 5.72
1993 5.60
1994 5.44
1995 5.81
1996 6.05
1997 6.17
1998 6.30
1999 6.09
2000 6.18
2001 5.93
2002 5.43
2003 5.50
2004 5.90
2005 6.09
2006 6.05
2007 6.14
2008 5.98
SOURCE: Authors' calculations based on SSA (2011).
Table equivalent for Chart 3. Projected percentage of individuals who will earn more than the tax max in at least one year, by birth cohort
Birth cohort Percentage
1926–1930 43.28
1931–1935 42.64
1936–1940 42.24
1941–1945 39.38
1946–1950 31.95
1951–1955 24.37
1956–1960 21.33
1961–1965 20.63
1966–1970 20.02
1971–1975 21.70
1976–1980 22.74
1981–1985 23.71
1986–1990 23.83
1991–1995 23.25
1996–2000 23.22
2001–2005 23.13
2006–2010 23.28
2011–2015 23.31
SOURCE: Authors' calculations based on MINT.
Table equivalent for Chart 4. Percentage of covered earnings subject to the tax max
Year Percentage
1937 92.0
1940 92.4
1945 87.9
1950 79.7
1951 81.1
1952 80.5
1953 78.5
1954 77.7
1955 80.3
1956 78.8
1957 77.5
1958 76.4
1959 79.3
1960 78.1
1961 77.4
1962 75.8
1963 74.6
1964 72.8
1965 71.3
1966 80.0
1967 78.1
1968 81.7
1969 80.1
1970 78.2
1971 76.3
1972 78.3
1973 81.8
1974 85.3
1975 84.4
1976 84.3
1977 85.0
1978 83.8
1979 87.3
1980 88.9
1981 89.2
1982 90.0
1983 90.0
1984 89.3
1985 88.9
1986 88.6
1987 87.6
1988 85.8
1989 86.8
1990 87.2
1991 87.8
1992 86.8
1993 87.2
1994 87.1
1995 85.8
1996 85.7
1997 85.1
1998 84.5
1999 83.9
2000 83.2
2001 84.7
2002 86.1
2003 85.9
2004 84.8
2005 84.1
2006 83.7
2007 82.6
2008 83.8
2009 85.7
SOURCE: Authors' calculations based on SSA (2011).
NOTE: Average percentage of covered earnings subject to the tax max from 1937 to 2009 = 83%
Table equivalent for Chart 5. Tax max ratio, 1937–2009
Year Tax max ratio
1937 2.55
1940 2.25
1945 0.88
1950 0.70
1951 0.77
1952 0.70
1953 0.69
1954 0.70
1955 0.77
1956 0.75
1957 0.75
1958 0.77
1959 0.78
1960 0.78
1961 0.77
1962 0.78
1963 0.78
1964 0.79
1965 0.79
1966 0.83
1967 0.83
1968 0.86
1969 0.81
1970 0.84
1971 0.84
1972 0.87
1973 0.90
1974 0.97
1975 1.04
1976 1.05
1977 1.01
1978 1.05
1979 1.27
1980 1.27
1981 1.42
1982 1.41
1983 1.59
1984 1.68
1985 1.71
1986 1.84
1987 2.01
1988 2.17
1989 2.14
1990 2.26
1991 2.17
1992 2.31
1993 2.29
1994 2.37
1995 2.44
1996 2.36
1997 2.41
1998 2.46
1999 2.65
2000 2.72
2001 2.58
2002 2.56
2003 2.57
2004 2.58
2005 2.61
2006 2.69
2007 2.83
2008 2.71
SOURCE: Authors' calculations based on SSA (2011).