{"id":2082,"date":"2026-06-22T17:04:51","date_gmt":"2026-06-22T17:04:51","guid":{"rendered":"https:\/\/jacksonvillemovingnews.com\/?p=2082"},"modified":"2026-06-22T17:04:51","modified_gmt":"2026-06-22T17:04:51","slug":"social-security-tax-rules-mean-elon-musk-could-pay-same-as-someone-making-184500","status":"publish","type":"post","link":"https:\/\/jacksonvillemovingnews.com\/?p=2082","title":{"rendered":"Social Security tax rules mean Elon Musk could pay same as someone making $184,500"},"content":{"rendered":"
\n

Elon Musk became the\u00a0world\u2019s first trillionaire\u00a0June 12, his net worth rocketing to $1.2 trillion when his space exploration firm SpaceX became publicly traded, valued at more than $2 trillion.<\/p>\n

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The historic wealth milestone renewed calls from some politicians to address wealth inequality and raise taxes on the richest Americans. Sen. Bernie Sanders, I-Vt., said Social Security taxes are capped for ultra-high earners like Musk.<\/p>\n

“Today, Elon Musk, a trillionaire, pays the same amount into Social Security as someone making $184,500,” Sanders\u00a0said in a June 12 X post, calling the situation absurd and in need of reform.\u00a0<\/p>\n

Sanders\u2019 statement accurately reflects a real feature of Social Security taxes. The federal government stops collecting the tax after a person\u2019s wages\u00a0reach a certain amount. In 2026, that cap is $184,500.\u00a0<\/p>\n

Musk couldn\u2019t pay more than the maximum, but his income structure is unique and heavily weighted toward stocks. It\u2019s unclear what his liability for Social Security taxes is each year.\u00a0<\/p>\n

For most wage earners, Social Security taxes, along with Medicare taxes, are paid through payroll deductions. Workers and employers\u00a0each pay 6.2%\u00a0of the worker\u2019s income into Social Security, up to the cap.\u00a0<\/p>\n

That means the\u00a0maximum Social Security tax liability\u00a0in 2026 for someone earning $184,500 or more is $11,439. Self-employed people must pay the full 12.4% rate on their income, so their Social Security taxes would max out at $22,878.<\/p>\n

Whether someone earns $200,000 or $2 million, they don\u2019t pay taxes over the income cap. Benefits are also capped, so earnings above the maximum don\u2019t increase a person\u2019s future benefits.<\/p>\n

“That maximum is identical for a worker earning $184,500 and for the richest person in the country,” said Teresa Ghilarducci, a labor economist and professor at the New School for Social Research, in an email to PolitiFact.<\/p>\n

Medicare taxes, the other portion of payroll taxes, have no income cap. Employees and employers\u00a0each pay 1.45%, and an additional 0.9% surcharge is imposed on wages over $200,000 a year.\u00a0<\/p>\n

Sanders\u2019 spokesperson Jeremy Slevin said Sanders\u2019 post was promoting the changes proposed in his\u00a0. The bill would eliminate the cap on Social Security taxes over $250,000 and apply the full Social Security payroll tax to more forms of income, including capital gains.<\/p>\n

What income counts for Social Security taxes?<\/strong><\/h2>\n

Social Security taxes are imposed only on income classified as wages, which is a regular paycheck for most workers. Bonuses and stock-based compensation like stock options or\u00a0restricted stock units\u00a0\u2014 if classified as wages \u2014 are subject to the tax once they\u2019re\u00a0exercised\u00a0(bought or sold) or\u00a0vested.\u00a0<\/p>\n

But the tax doesn\u2019t apply to non wage-related income such as capital gains from investments, said Jessica Riedl, a Brookings Institution budget and tax fellow.<\/p>\n

Musk\u2019s wealth is\u00a0tied up almost entirely\u00a0in stock in Tesla, his electric car company; and SpaceX, the spaceflight company that also houses satellite telecommunications company Starlink and xAI, the social media and AI company behind X and Grok.<\/p>\n

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When Musk sells that stock or takes out a loan against it, that\u2019s not counted as wages, so it isn\u2019t subject to payroll tax.\u00a0<\/p>\n

Increases in stock value also don\u2019t trigger Social Security taxes. The\u00a0recent jump\u00a0in Musk\u2019s net worth from around $800 billion to over $1 trillion was not because he was paid billions of dollars, but because SpaceX increased in value once it went public.<\/p>\n

When does Musk pay Social Security taxes?\u00a0<\/strong><\/h2>\n

It\u2019s impossible for us to determine Musk\u2019s total liability for federal payroll taxes, but public disclosures give a window into some of his income.\u00a0<\/p>\n

Musk\u00a0does not take a salary\u00a0from Tesla, so he owes no taxes there. A Securities and Exchange Commission filing from SpaceX ahead of its initial public offering shows that he\u00a0received a salary of $54,080, which was tied to California\u2019s minimum wage for\u00a0exempt employees. His other companies, The Boring Company and Neuralink, are private, so they do not disclose his compensation.\u00a0<\/p>\n

Musk\u2019s major payroll tax liability in recent years has come from exercising stock options that were paid as compensation. In 2021, he exercised an option to buy Tesla stock at a major discount based on a 2012 compensation package, which\u00a0resulted in more than $20 billion\u00a0in taxable income.\u00a0<\/p>\n

Although his income tax bill was\u00a0likely over $11 billion\u00a0that year, his Social Security tax burden would have been far less because of the cap. He would have been on the hook for about $8,853, the same as someone who earned that year\u2019s taxable maximum of $142,800.<\/p>\n

There\u2019s one caveat to Sanders\u2019 statement: It\u2019s possible that in some years Musk could pay even less than someone earning the maximum, Ghilarducci said.\u00a0<\/p>\n

In years when his stock-based compensation doesn’t incur payroll taxes, “his wage income can be near zero,” she said. “In such a year he pays less into Social Security than a salaried worker earning $184,500, possibly far less.”\u00a0<\/p>\n

Our ruling<\/strong><\/h2>\n

Sanders said Musk “pays the same amount into Social Security as someone making $184,500.”\u00a0<\/p>\n

Social Security taxes are imposed only on income up to a set maximum, which is $184,500 in 2026, so Sanders is right that any wages over that limit aren\u2019t taxed. But since we can\u2019t know how much wage-based income Musk will receive this year, it\u2019s not clear that he\u2019ll hit that maximum. He could pay even less.<\/p>\n

Increases in Musk\u2019s net worth are often caused by increasing stock value, rather than compensation. Such unrealized gains aren\u2019t subject to Social Security taxes.\u00a0<\/p>\n

Sanders\u2019 statement is accurate but could use a little more information. We rate it Mostly True.<\/p>\n

Read more Bloody knife, sword and axe found after man stabbed stepfather to death, MDSO says<\/a><\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

“Today, Elon Musk, a trillionaire, pays the same amount into Social Security as someone making $184,500,” Sen. 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