Fix Social Security and Medicare

The best way to start to “fix” Social Security and Medicare would be for the IRS to redefine the term “salary, wages, and tips” as referred to on line 7 of the Form 1040 to include all compensation, regardless of form received by an employee.  If self employed, in a partnership, sole proprietorship, or owner of an “S” Corporation,  this definition should include all income received.  Second, the cap on the employer side should be eliminated and on the employee side raised to $1,000,000.  Any “gimmicks” such as working for $1.00 with income deferred should be disallowed.  One test to determine “income from work” should be whether or not there is a contract of employment in place.  If so, everything in the form of compensation in that contract should be reportable as “salary, wages, or tips”.  Another test should be any payment deducted by an employer as an employee compensation expense shall be reported as “salary, wages, or tips” received by that employee on form W-2.