What tax does the government establishes an income cap for each year?

The government establishes an income cap for the Social Security tax, which limits the amount of earnings subject to this payroll tax. Each year, the Social Security Administration sets this cap, which is adjusted based on changes in national average wage levels. Earnings above this cap are not taxed for Social Security purposes, although they may still be subject to other taxes, such as Medicare tax. This cap helps ensure that Social Security funding is balanced with the contributions from higher earners.