stockmover: "If you look at my bolded part its obvious that $106,800 cap is not fair, favors the wealthy and should be eliminated. I suspect if that were to happen that the total SE tax rate % would be significantly reduced for everyone.

This may seem simplistic, but I believe it would result in a fairer SE tax system. Of course this does not address the wealthy individuals who derive their income solely from capital gains and dividend income.

Any comments?"

Are you also increasing the payments to those who pay more?

From http://www.ssa.gov/oact/COLA/piaformula.html

"PIA formula
For an individual who first becomes eligible for old-age insurance benefits or disability insurance benefits in 2012, or who dies in 2012 before becoming eligible for benefits, his/her PIA will be the sum of:

(a) 90 percent of the first $767 of his/her average indexed monthly earnings, plus
(b) 32 percent of his/her average indexed monthly earnings over $767 and through $4,624, plus
(c) 15 percent of his/her average indexed monthly earnings over $4,624.

AIME is capped because of the cap of income on which SS tax is paid.

Mid to high income people already take in the shorts with the inflection points.

Note that 767 * 12 < $9,600 annual income;
that 4624 * 12 < $56,00 annual income: and
that AIME is capped at either 106,800/12 or 110,100/12.

How do your propose to calculate payments due those whom you woudl require to pay more ni taxes?

Regards, JAFO
(in theory, no fan of the income limit)