Totally agree that labor should be taxed lower than passive income/capital gains.

For SS and Medicare, I'm cool with putting them in the general fund, but I'm not sure how you would get around paying for them without the payroll tax, unless taxes were increased elsewhere. Capital gains, maybe?

The origin of the tax max for social security is a mystery to me. It's been around since FDR/Congress created SS in 1937.

Here is a good article on the tax max, and I found 2 interesting points.

https://www.ssa.gov/policy/docs/policybriefs/pb2011-02.html

1. The inflation adjusted tax max has, in general, been increasing over the life of the program.

2. The 1950's and 1960's saw 1/3 of all workers exceeding the tax max, compared to 5% today. This is a bad thing, as this just means there are more people making less money who have their entire income subject to the tax.

In short, this is just another indicator that income inequality has gotten worse since Eisenhower.