If you stroll through the streets of Chicago, you have likely heard from the locals and longtime transplants about the famous Stan's Donuts & Coffee on North Damen Avenue. Though they aren't my preferred dessert, I must profess that the donuts live up to their hype.

Yet there is another, far less savory donut—or at least a donut hole—that has everyone talking: President Joe Biden's plan to impose payroll taxes on earnings above $400,000, creating a "hole" between that figure and the current ceiling of $142,800 in taxed wages.

For wage earners, Social Security and Medicare taxes—collectively known as payroll taxes—equal 6.2 percent and 1.45 percent, respectively. Both are automatically withheld from paychecks by employers under the "pay as you go" tax system. For 2021, Social Security taxes are applied only on the first $142,800 in earnings, but Medicare taxes have no income limitation.