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| Actuarial Publications |
Summary of Provisions That Would Change the Social Security Program |
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Description of Proposed Provisions:
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Estimates based on the intermediate assumptions of the 2012 Trustees Report
| Printer-friendly Version (PDF) |
| Change from present law | Results with this provision | |||||
|---|---|---|---|---|---|---|
| Long-range actuarial balance |
Annual balance in 75th year |
Long-range actuarial balance |
Annual balance in 75th year |
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| Present Law, Alternative II. |
-2.67 | -4.50 | ||||
| E1.1 |
Increase the payroll tax rate (currently 12.4 percent) to 15.3 percent
in 2013 and later.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board) |
2.75 | 2.87 | 0.09 | -1.63 | |
| E1.2 |
Increase the payroll tax rate (currently 12.4 percent) to 15.3 percent in
2025-2054, and to 18.2 percent in years 2055 and later.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board) |
3.02 | 5.62 | 0.35 | 1.11 | |
| E1.3 |
Reduce the payroll tax rate (currently 12.4 percent) to 11.4 percent in
2013 and later.
graph | table | pdf-graph | pdf-table | memo (Warshawsky) |
-0.97 | -1.01 | -3.63 | -5.51 | |
| E1.4 |
Increase the payroll tax rate (currently 12.4 percent) by 0.1 percentage point
each year from 2018-2037, until the rate reaches 14.4 percent in 2037 and later.
graph | table | pdf-graph | pdf-table | memo (National Academy of Social Insurance) |
1.41 | 1.99 | -1.25 | -2.52 | |
| E1.5 |
Increase the payroll tax rate (currently 12.4 percent) to 12.6 percent in 2015, 12.9
percent in 2023, 13.1 in percent in 2033, 13.9 percent in 2043, 13.5 percent in 2053,
and 13.3 percent in 2063 and later.
graph | table | pdf-graph | pdf-table | memo (NRC/NAPA) |
0.74 | 0.91 | -1.93 | -3.60 | |
| E1.6 |
Increase the payroll tax rate (currently 12.4 percent) to 12.6 percent in 2015, 12.9
percent in 2023, 13.3 in percent in 2033, 13.8 percent in 2043, 14.4 percent in 2063,
and 14.5 percent in 2078 and later.
graph | table | pdf-graph | pdf-table | memo (NRC/NAPA) |
1.04 | 2.07 | -1.63 | -2.44 | |
| E1.7 |
Increase the payroll tax rate (currently 12.4 percent) to 12.7 percent in 2015, 13.0
percent in 2028, 13.3 in percent in 2043, 14.0 percent in 2063, 14.5 percent in 2073,
and 14.7 percent in 2083 and later.
graph | table | pdf-graph | pdf-table | memo (NRC/NAPA) |
0.84 | 2.25 | -1.82 | -2.26 | |
| E1.8 |
Increase the payroll tax rate (currently 12.4 percent) by 0.1 percentage point each year
from 2015-2020, until the rate reaches 13.0 percent for 2020 and later.
graph | table | pdf-graph | pdf-table | memo (Moore) |
0.53 | 0.60 | -2.13 | -3.90 | |
| E2.1 |
Eliminate the taxable maximum in years 2013 and later, and apply full 12.4 percent
payroll tax rate to all earnings. Do not provide benefit credit for earnings above
the current-law taxable maximum.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board) |
2.36 | 2.49 | -0.31 | -2.02 | |
| E2.2 |
Eliminate the taxable maximum in years 2013 and later, and apply full 12.4 percent
payroll tax rate to all earnings. Provide benefit credit for earnings above the
current-law taxable maximum.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board) |
1.92 | 1.64 | -0.75 | -2.86 | |
| E2.3 |
Eliminate the taxable maximum in years 2013 and later, and apply full 12.4 percent
payroll tax rate to all earnings. Provide benefit credit for earnings above the
current-law taxable maximum, adding a bend point at the current-law taxable maximum
and applying a formula factor of 3 percent for AIME above this new bend point.
graph | table | pdf-graph | pdf-table | memo (National Academy of Social Insurance) |
2.16 | 2.18 | -0.51 | -2.32 | |
| E2.4 |
Eliminate the taxable maximum for years 2019 and later (phased in 2013-2018), and
apply full 12.4 percent payroll tax rate to all earnings. Provide benefit credit
for earnings above the current-law taxable maximum that were taxed after 2012,
using a secondary PIA formula. This secondary PIA formula uses: (1) an “AIME+”
derived from annual earnings from each year after 2012 that were in excess of that
year’s current-law taxable maximum; (2) a bend point equal to 134 percent higher
of the monthly current-law taxable maximum; and (3) formula factors of 3 percent
and 0.25 percent, respectively.
graph | table | pdf-graph | pdf-table | memo (Deutch) |
2.18 | 2.37 | -0.48 | -2.14 | |
| E2.5 |
Apply 12.4 percent payroll tax rate on earnings above $250,000 starting in 2013, and
tax all earnings once the current-law taxable maximum exceeds $250,000. Do not provide
benefit credit for additional earnings taxed.
graph | table | pdf-graph | pdf-table | memo (Sanders) | memo (DeFazio) |
2.14 | 2.49 | -0.53 | -2.02 | |
| E2.6 |
Apply a 3 percent payroll tax on earnings above the current-law taxable maximum starting
in 2013. Do not provide benefit credit for earnings above the current-law taxable maximum.
graph | table | pdf-graph | pdf-table | memo (AARP) |
0.61 | 0.64 | -2.06 | -3.86 | |
| E2.7 |
Apply a 6 percent payroll tax on earnings above the current-law taxable maximum starting
in 2013. Do not provide benefit credit for earnings above the current-law taxable maximum.
graph | table | pdf-graph | pdf-table | memo (Wexler) |
1.19 | 1.26 | -1.47 | -3.25 | |
| E2.8 |
Apply a 2 percent payroll tax on earnings above the current-law taxable maximum for
years 2015-2062, and a 3 percent rate for years 2063 and later. Do not provide
benefit credit for earnings above the current-law taxable maximum.
graph | table | pdf-graph | pdf-table | memo (NRC/NAPA) |
0.44 | 0.64 | -2.22 | -3.87 | |
| E2.9 |
Apply the following payroll tax rates above the current-law taxable maximum: 2.0
percent in 2015, 3.0 percent in 2028, 3.5 percent in 2043, 4.5 percent in 2053,
and 5.5 percent in 2063 and later. Do not provide benefit credit for earnings
above the current-law taxable maximum.
graph | table | pdf-graph | pdf-table | memo (NRC/NAPA) |
0.70 | 1.15 | -1.96 | -3.36 | |
| E2.10 |
Eliminate the taxable maximum in years 2023 and later. Phase in elimination by
taxing all earnings above the current-law taxable maximum at: 1.24 percent in 2014,
2.48 percent in 2015, and so on, up to 11.16 percent in 2022. Provide benefit credit
for earnings above the current-law taxable maximum, adding a bend point at the
current-law taxable maximum and applying a formula factor of 5 percent for AIME above
this new bend point.
graph | table | pdf-graph | pdf-table | memo (Harkin 2012) |
1.92 | 2.09 | -0.74 | -2.42 | |
| E2.11 |
Eliminate the taxable maximum in years 2018 and later. Phase in elimination by taxing all
earnings above the current law taxable maximum at 2.48% in 2014, 4.96% in 2015, up to 12.4%
in 2018 and later. Credit the additional earnings for benefit purposes by: (a) calculating a
second average indexed monthly earnings ("AIME+") reflecting only earnings taxed above the
current law taxable maximum, (b) applying a 5 percent factor on this newly computed "AIME+"
to develop a second component of the PIA, and (c) adding this second component to the
current-law PIA.
graph | table | pdf-graph | pdf-table | memo (Harkin 2013) |
2.11 | 2.21 | -0.56 | -2.30 | |
| E2.12 |
Eliminate the taxable maximum in years 2024 and later. Phase in elimination by taxing all
earnings above the current-law taxable maximum at: 1.24 percent in 2015, 2.48 percent in
2016, and so on, up to 11.16 percent in 2023. Provide benefit credit for earnings above
the current-law taxable maximum, adding a bend point at the current law taxable maximum and
applying a formula factor of 3 percent for AIME above the new bend point.
graph | table | pdf-graph | pdf-table | memo (Moore) |
1.92 | 2.18 | -0.75 | -2.32 | |
| E3.1 |
Increase the taxable maximum such that 90 percent of earnings would be subject to
the payroll tax (phased in 2013-2022). Provide benefit credit for earnings up to
the revised taxable maximum levels.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board) |
0.78 | 0.68 | -1.89 | -3.83 | |
| E3.2 |
Increase the taxable maximum such that 90 percent of earnings would be subject to
the payroll tax (phased in 2013-2022). Do not provide benefit credit for additional
earnings taxed.
graph | table | pdf-graph | pdf-table | memo (Liebman, MacGuineas, Samwick) |
0.98 | 1.14 | -1.68 | -3.36 | |
| E3.3 |
Increase the taxable maximum such that 90 percent of earnings would be subject to
the payroll tax (phased in 2014-2019). Provide benefit credit for earnings up to
the revised taxable maximum levels.
graph | table | pdf-graph | pdf-table | memo (AARP) |
0.79 | 0.68 | -1.87 | -3.83 | |
| E3.4 |
Increase the taxable maximum from $106,800 to $115,200 (in 2009 AWI-indexed dollars),
phased in 2013-2015. Provide benefit credit for earnings up to the revised taxable
maximum levels.
graph | table | pdf-graph | pdf-table | memo (Warshawsky) |
0.11 | 0.08 | -2.55 | -4.42 | |
| E3.5 |
Increase the taxable maximum each year by an additional 2 percent beginning in 2013
until taxable earnings equal 90 percent of covered earnings. Provide benefit credit
for earnings up to the revised taxable maximum levels.
graph | table | pdf-graph | pdf-table | memo (Bipartisan Policy Center) | memo (National Academy of Social Insurance) |
0.62 | 0.71 | -2.04 | -3.79 | |
| E3.6 |
Increase the taxable maximum each year by an additional 2 percent beginning in 2015
until taxable earnings equal 90 percent of covered earnings. Do not provide benefit
credit for additional earnings taxed.
graph | table | pdf-graph | pdf-table | memo (NRC/NAPA) |
0.73 | 1.14 | -1.94 | -3.37 | |
| E3.7 |
Increase the taxable maximum by an additional 2 percent per year beginning in
2014 until taxable earnings equal 90 percent of covered earnings. Provide
benefit credit for earnings up to the revised taxable maximum levels. Create
a new bend point equal to the current-law taxable maximum with a 5 percent
formula factor applying above the new bend point.
graph | table | pdf-graph | pdf-table | memo (Fiscal Commission) |
0.63 | 0.82 | -2.03 | -3.69 | |
| E3.8 |
Beginning in 2020, apply 2 percent payroll tax rate on earnings over the
wage-indexed equivalent of $200,000 in 2017, with the threshold wage-indexed
after 2020. Provide proportional benefit credit for additional earnings taxed.
graph | table | pdf-graph | pdf-table | memo (Johnson, Brady, Ryan) (similar provisions with 3 percent and 4 percent payroll tax rates are also available) |
0.20 | 0.17 | -2.46 | -4.33 | |
| E3.9 |
Beginning in 2020, apply 2 percent payroll tax rate on earnings over the
wage-indexed equivalent of $200,000 in 2017, with the threshold wage-indexed
after 2020. Do not provide benefit credit for additional earnings taxed.
graph | table | pdf-graph | pdf-table | memo (Johnson, Brady, Ryan) (similar provisions with 3 percent and 4 percent payroll tax rates are also available) |
0.26 | 0.31 | -2.40 | -4.19 | |
| E3.10 |
Beginning in 2020, apply 2 percent payroll tax rate on earnings over the
wage-indexed equivalent of $300,000 in 2017, with the threshold wage-indexed
after 2020. Provide proportional benefit credit for additional earnings taxed.
graph | table | pdf-graph | pdf-table | memo (Johnson, Brady, Ryan) (similar provisions with 3 percent and 4 percent payroll tax rates are also available) |
0.15 | 0.13 | -2.51 | -4.38 | |
| E3.11 |
Beginning in 2020, apply 2 percent payroll tax rate on earnings over the
wage-indexed equivalent of $300,000 in 2017, with the threshold wage-indexed
after 2020. Do not provide benefit credit for additional earnings taxed.
graph | table | pdf-graph | pdf-table | memo (Johnson, Brady, Ryan) (similar provisions with 3 percent and 4 percent payroll tax rates are also available) |
0.20 | 0.24 | -2.47 | -4.27 | |
| E3.12 |
Beginning in 2020, apply 2 percent payroll tax rate on earnings over the
wage-indexed equivalent of $400,000 in 2017, with the threshold wage-indexed
after 2020. Provide proportional benefit credit for additional earnings taxed.
graph | table | pdf-graph | pdf-table | memo (Johnson, Brady, Ryan) (similar provisions with 3 percent and 4 percent payroll tax rates are also available) |
0.13 | 0.10 | -2.54 | -4.40 | |
| E3.13 |
Beginning in 2020, apply 2 percent payroll tax rate on earnings over the
wage-indexed equivalent of $400,000 in 2017, with the threshold wage-indexed
after 2020. Do not provide benefit credit for additional earnings taxed.
graph | table | pdf-graph | pdf-table | memo (Johnson, Brady, Ryan) (similar provisions with 3 percent and 4 percent payroll tax rates are also available) |
0.16 | 0.19 | -2.51 | -4.31 | |
| E3.14 |
Eliminate the taxable maximum for the employer payroll tax (6.2 percent)
beginning in 2013. For the employee payroll tax (6.2 percent) and for
benefit calculation purposes, beginning in 2013, increase the taxable
maximum by an additional 2 percent per year until taxable earnings equal
90 percent of covered earnings.
graph | table | pdf-graph | pdf-table | memo (National Academy of Social Insurance) |
1.44 | 1.42 | -1.22 | -3.09 | |
| E3.15 |
Increase the taxable maximum until taxable earnings equal 90 percent of covered
earnings (phased in 2013-2022). In addition, apply a tax rate of 6.2 percent
for earnings above the revised taxable maximum (phased in from 2013-2022).
Provide benefit credit on earnings taxed up to the revised taxable maximum.
graph | table | pdf-graph | pdf-table | memo (Senate Special Committee on Aging) |
1.40 | 1.38 | -1.26 | -3.12 | |
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