One topic likely to come up this winter in Washington is Social Security’s so-called cap.

All that many people know about the cap is that it is an obscure device that affects payroll tax payment structure. Reports are that everyone from the Treasury secretary’s staff to the Brookings Institution is talking about fiddling with or removing the cap. This is bad news, for the little gizmo really is crucial to American growth.

The Sarbanes-Oxley law has damaged Wall Street’s competitiveness — the shift in initial public offerings to non-American venues demonstrates that. High corporate taxes are also a problem. But overall the American economy has remained relatively competitive. Or, to put the question in other terms, financial capital may have some new hesitations about the desirability of locating in America, but human capital doesn’t — immigration proves that.

Work here isn’t only well paid, it is also relatively lightly taxed, at least compared with work in other developed nations.

The Bush tax cuts helped create this situation. By rolling back the increases put in place by his own father and President Clinton, President Bush and Congress did much to sustain relative competitiveness. The Clinton-Rubin cut in the capital gains tax, as well as the more recent cuts in capital gains and dividend taxes, were crucial.

The cap on Social Security has also played a role. Currently Americans pay 6.2% of their earnings on Social Security, and their employers match that with another 6.2%. Once you earn beyond a certain amount, $94,200 this year, as about 6% of Americans do, there is no more tax. The cap keeps the overall and marginal tax burden down.

As the Nobel prize-winning economist Edward Prescott recently noted, heavy social insurance costs — health care, government pensions — mean that European workers paid their governments as much as 60% of the last euro they earned in recent decades. In America, the equivalent marginal rate was something like 40%.

This difference turns out to matter, to make us an espresso-at-the-desk culture, instead of a cafe culture like Europe. Mr. Prescott showed that the desire to work correlates, over decades, with marginal tax rates. The lower the tax, the more the desire to work. As a result of our system, Americans worked half again as much as Europeans.

Still, the cap removal discussion is on. Lawrence Mishel of the Economic Policy Institute has published papers pointing out that lifting the cap would do much to narrow Social Security’s shortfall. The scholar chosen by the Democrats to direct the Congressional Budget Office, Peter Orszag, has likewise suggested cap adjustment. Some Republicans are willing to trade cap abolition for privatization of some share of Social Security.

Advocates of cap fiddling argue that they will merely raise the income subject to the cap, not do away with it. Or they say that workers will not notice cap removal. They point out that back in the 1990s the economy grew robustly even though the new president, Mr. Clinton, removed the cap on Medicare. Besides, they point out, only about 6% of taxpayers earn beyond the cap — and it is only fair for the rich to pay their share. If Social Security is in crisis, they argue furthermore, then we all have to make sacrifices such as the cap abolition.

None of these arguments is persuasive. Once talk of cap removal becomes popular, abolition comes next — the billions in revenue such an abolition would bring in is too tempting for the outcome to be otherwise.

The Medicare tax increase — 1.45% for employees — was much smaller than a payroll-tax increase would be. Those who make $100,000 or higher may be envied, but they also produce jobs, and so need our support. It is Republican heresy to say it, but the privatization trade isn’t worth it.

Even the crisis argument is weak. Adjusting the base pension of Social Security recipients so that the real amount stays the same — instead of including annual post-inflation increases — would erase more than half of the budget shortfalls.

But the most important argument for preserving the cap is the espresso-in-the-office culture. Executives don’t always reason out why they feel better toward the end of the year. But they do. And one reason is that the cap functions like a year-end bonus.

In autumn, many workers see their take-home rise as they “earn out” of the cap system and suddenly get to take home that extra 6.2%. Employers for their part notice because they no longer have to pay their matching share of 6.2%, and so sometimes pass the extra cash along to earners. The cap makes Americans work the extra increment.

Removing the cap would undo all that. Higher earners would face an effective marginal rate increase of something like 10%. That increase alone wipes out all the Bush income tax cuts, the best part of the Bush legacy, reason alone for Rep. Nancy Pelosi to support it.

Cap removal takes away the espresso and makes Americans more like sleepy Europeans. Or, to put the whole story in terms of analogies: Cap removal is to Main Street what Sarbanes-Oxley is to Wall Street — the sort of blow almost everyone regrets, but only later.

Miss Shlaes is a visiting senior fellow at the Council on Foreign Relations and is a columnist for Bloomberg News.