Summary Measures and Graphs
Description of Proposed Provision:
E2.4: Eliminate the taxable maximum for years 2028 and later (phased in 2022-2028), and apply full 12.4 percent payroll tax rate to all earnings. Provide benefit credit for earnings above the current-law taxable maximum that are subject to the payroll tax, using a secondary PIA formula. This secondary PIA formula involves: (1) an "AIME+" derived from annual earnings from each year after 2021 that were in excess of that year's current-law taxable maximum; (2) a new bend point equal to 134 percent of the monthly current-law taxable maximum; and (3) formula factors of 3 percent and 0.25 percent below and above the new bend point, respectively.
Estimates based on the intermediate assumptions
of the 2021 Trustees Report
Summary Measures | |||||||
---|---|---|---|---|---|---|---|
Current law [percent of payroll] |
Change from current law [percent of payroll] |
Shortfall eliminated | |||||
Long-range actuarial balance |
Annual balance in 75th year |
Long-range actuarial balance |
Annual balance in 75th year |
Long-range actuarial balance |
Annual balance in 75th year |
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-3.54 | -4.34 | 2.39 | 2.59 | 68% | 60% |