Social Security Base Wage

• The Social Security base wage is a limit on an individual's income. This limit determines how much of your income is used to calculate how much you must pay in Social Security tax. The base wage income for 2011 is the same as 2010, which is $106,800 per year. This limit means that only your income equal to or lower than $106,800 is taxed for Social Security purposes. Any income you receive after this limit is not taxed.
  
  

Increasing Base Wage

• The Social Security base wage increases every year as long as the national average wage index increases. The average wage index is an index that the Social Security Administration uses to show how much the national average wage has grown from one year to the other.
  
  

Personal Benefits

• You can see several benefits from an increase on the Social Security base wage. The first benefit is from a personal level. The Social Security tax you pay is what determines how much you are going to receive once you retire, since it shows a record of your earnings during your work life. People who have high income levels, higher than $106,800 per year, only pay so much of their income on Social Security tax. This means that their Social Security pension is limited with respect to what they have earned for a certain number of years. As the base wage increases, so does the amount that people pay in Social Security tax, and, therefore, their retirement benefits increase.
  
  

National Benefits

• Social Security taxes accumulate funds to pay retirement benefits to each individual who has paid into the program. However, these funds are not only used for this purpose. Social Security tax funds are also used to pay benefits to your spouse and your children in some circumstances and also to pay other Social Security program benefits. As the base wage increases, so does the amount people pay in Social Security tax, which increases the overall fund that Social Security has to work with. This means that the Social Security Administration has more money to put into its programs, which benefits any person who apply for any of these benefits.