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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 2015 Trustees Report
| Printer-friendly Version (PDF) |
| Change from present law [percent of payroll] |
Shortfall eliminated | |||||
|---|---|---|---|---|---|---|
| Long-range actuarial balance |
Annual balance in 75th year |
Long-range actuarial balance |
Annual balance in 75th year |
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| Present law shortfall in long-range actuarial balance is 2.68 percent of payroll and in annual balance for the 75th year is 4.65 percent of payroll. | ||||||
| E1.1 |
Increase the payroll tax rate (currently 12.4 percent) to 15.3 percent in 2016 and later.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board) |
2.76 | 2.87 | 103% | 62% | |
| E1.2 |
Increase the payroll tax rate (currently 12.4 percent) to 15.2 percent in
2028-2057, and to 18.0 percent in years 2058 and later.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board) |
2.95 | 5.43 | 110% | 117% | |
| E1.3 |
Reduce the payroll tax rate (currently 12.4 percent) to 11.4 percent in 2016 and later.
graph | table | pdf-graph | pdf-table | memo (Warshawsky) |
-0.97 | -1.01 | -36% | -22% | |
| E1.4 |
Increase the payroll tax rate (currently 12.4 percent) by 0.1 percentage point
each year from 2021-2040, until the rate reaches 14.4 percent in 2040 and later.
graph | table | pdf-graph | pdf-table | memo (Larson 2014) | memo (National Academy of Social Insurance) |
1.43 | 1.99 | 53% | 43% | |
| E1.5 |
Increase the payroll tax rate (currently 12.4 percent) to 12.6 percent in 2018,
12.9 percent in 2026, 13.1 in percent in 2036, 13.9 percent in 2046, 13.5 percent
in 2056, and 13.3 percent in 2066 and later.
graph | table | pdf-graph | pdf-table | memo (NRC/NAPA) |
0.75 | 0.91 | 28% | 20% | |
| E1.6 |
Increase the payroll tax rate (currently 12.4 percent) to 12.6 percent in 2018,
12.9 percent in 2026, 13.3 in percent in 2036, 13.8 percent in 2046, 14.4 percent
in 2066, and 14.5 percent in 2081 and later.
graph | table | pdf-graph | pdf-table | memo (NRC/NAPA) |
1.05 | 2.07 | 39% | 44% | |
| E1.7 |
Increase the payroll tax rate (currently 12.4 percent) to 12.7 percent in 2018,
13.0 percent in 2031, 13.3 in percent in 2046, 14.0 percent in 2066, 14.5 percent
in 2076, and 14.7 percent in 2086 and later.
graph | table | pdf-graph | pdf-table | memo (NRC/NAPA) |
0.85 | 2.25 | 32% | 48% | |
| E1.8 |
Increase the payroll tax rate (currently 12.4 percent) by 0.1 percentage point
each year from 2018-2023, until the rate reaches 13.0 percent for 2023 and later.
graph | table | pdf-graph | pdf-table | memo (Moore) |
0.54 | 0.60 | 20% | 13% | |
| E1.9 |
Increase the payroll tax rate (currently 12.4 percent) by 0.1 percentage point each
year from 2019-2042, until the rate reaches 14.8 percent in 2042. Then increase the
payroll tax rate an additional 0.1 percentage point in each year from 2081-2085,
until the rate reaches 15.3 percent for 2085 and later.
graph | table | pdf-graph | pdf-table | memo (Larson 2015) |
1.74 | 2.85 | 65% | 61% | |
| E2.1 |
Eliminate the taxable maximum in years 2016 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 (DeFazio 2015) | memo (Social Security Advisory Board) |
2.36 | 2.47 | 88% | 53% | |
| E2.2 |
Eliminate the taxable maximum in years 2016 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) |
1.91 | 1.60 | 71% | 34% | |
| E2.3 |
Eliminate the taxable maximum in years 2016 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 | 2.15 | 81% | 46% | |
| E2.4 |
Eliminate the taxable maximum for years 2022 and later (phased in 2016-2021), 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 2015 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.
graph | table | pdf-graph | pdf-table | memo (Deutch 2015) | memo (Deutch 2010) |
2.18 | 2.34 | 81% | 50% | |
| E2.5 |
Apply 12.4 percent payroll tax rate on earnings above $250,000 starting in 2016,
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 2015) | memo (Sanders 2013) | memo (DeFazio 2011) |
2.18 | 2.46 | 81% | 53% | |
| E2.6 |
Apply a 3 percent payroll tax on earnings above the current-law taxable maximum
starting in 2016. 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 | 23% | 14% | |
| E2.7 |
Apply a 6 percent payroll tax on earnings above the current-law taxable maximum
starting in 2016. Do not provide benefit credit for earnings above the current-law
taxable maximum.
graph | table | pdf-graph | pdf-table | memo (Wexler) |
1.19 | 1.25 | 44% | 27% | |
| E2.8 |
Apply a 2 percent payroll tax on earnings above the current-law taxable maximum
for years 2018-2065, and a 3 percent rate for years 2066 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 | 0.63 | 16% | 14% | |
| E2.9 |
Apply the following payroll tax rates above the current-law taxable maximum:
2.0 percent in 2018, 3.0 percent in 2031, 3.5 percent in 2046, 4.5 percent in
2056, and 5.5 percent in 2066 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 | 1.14 | 26% | 24% | |
| E2.10 |
Eliminate the taxable maximum in years 2026 and later. Phase in elimination by
taxing all earnings above the current-law taxable maximum at: 1.24 percent in
2017, 2.48 percent in 2018, and so on, up to 11.16 percent in 2025. 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 | 2.05 | 72% | 44% | |
| E2.11 |
Eliminate the taxable maximum in years 2021 and later. Phase in elimination by
taxing all earnings above the current-law taxable maximum at: 2.48 percent in
2017, 4.96 percent in 2018, and so on, up to 12.40 percent in 2021. 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 2016 that were in excess
of that year's current-law taxable maximum; and (2) a formula factor of 5 percent on
this newly computed "AIME+".
graph | table | pdf-graph | pdf-table | memo (Schatz) | memo (Harkin 2013) |
2.09 | 2.16 | 78% | 46% | |
| E2.12 |
Eliminate the taxable maximum in years 2027 and later. Phase in elimination by
taxing all earnings above the current-law taxable maximum at: 1.24 percent in
2018, 2.48 percent in 2019, and so on, up to 11.16 percent in 2026. Provide
benefit credit for earnings above the current-law taxable maximum. Create a new
bend point at the current-law taxable maximum with a 3 percent formula factor
applying above the new bend point.
graph | table | pdf-graph | pdf-table | memo (Moore) |
1.92 | 2.15 | 72% | 46% | |
| E2.13 |
Apply OASDI payroll tax rate on earnings above $400,000 starting in 2017, and
tax all earnings once the current-law taxable maximum exceeds $400,000. 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 2016
that were in excess of that year's current-law taxable maximum; and (2) a formula
factor of 2 percent on this newly computed "AIME+".
graph | table | pdf-graph | pdf-table | memo (Larson 2015) | memo (Larson 2014) |
1.86 | 2.34 | 69% | 50% | |
| E3.1 |
Increase the taxable maximum such that 90 percent of earnings would be subject to
the payroll tax (phased in 2016-2025). Provide benefit credit for earnings up to
the revised taxable maximum.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board) |
0.77 | 0.63 | 29% | 14% | |
| E3.2 |
Increase the taxable maximum such that 90 percent of earnings would be subject to the
payroll tax (phased in 2016-2025). Do not provide benefit credit for additional earnings
taxed.
graph | table | pdf-graph | pdf-table | memo (Liebman, MacGuineas, Samwick) |
0.98 | 1.10 | 37% | 24% | |
| E3.3 |
Increase the taxable maximum such that 90 percent of earnings would be subject to the
payroll tax (phased in 2017-2022). Provide benefit credit for earnings up to the revised
taxable maximum.
graph | table | pdf-graph | pdf-table | memo (AARP) |
0.79 | 0.63 | 29% | 14% | |
| E3.4 |
Increase the taxable maximum from $106,800 to $115,200 (in 2009 AWI-indexed dollars),
phased in 2016-2018. Provide benefit credit for earnings up to the revised taxable
maximum.
graph | table | pdf-graph | pdf-table | memo (Warshawsky) |
0.12 | 0.08 | 4% | 2% | |
| E3.5 |
Increase the taxable maximum each year by an additional 2 percent beginning in
2016 until taxable earnings equal 90 percent of covered earnings. Provide benefit
credit for earnings up to the revised taxable maximum.
graph | table | pdf-graph | pdf-table | memo (Bipartisan Policy Center) | memo (National Academy of Social Insurance) |
0.62 | 0.66 | 23% | 14% | |
| E3.6 |
Increase the taxable maximum each year by an additional 2 percent beginning in
2018 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 | 1.10 | 27% | 24% | |
| E3.7 |
Increase the taxable maximum by an additional 2 percent per year beginning in 2017
until taxable earnings equal 90 percent of covered earnings. Provide benefit credit
for earnings up to the revised taxable maximum. 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 | 0.77 | 24% | 16% | |
| E3.8 |
Beginning in 2023, apply 2 percent payroll tax rate on earnings over the
wage-indexed equivalent of $200,000 in 2017, with the threshold wage-indexed
after 2023. Provide proportional benefit credit for additional earnings taxed,
based on the payroll tax rate applied to the additional earnings divided by
the full 12.4 percent payroll tax rate.
graph | table | pdf-graph | pdf-table | memo (Johnson, Brady, Ryan) (includes similar provisions with 3 percent and 4 percent payroll tax rates) |
0.19 | 0.16 | 7% | 3% | |
| E3.9 |
Beginning in 2023, apply 2 percent payroll tax rate on earnings over the
wage-indexed equivalent of $200,000 in 2017, with the threshold wage-indexed
after 2023. Do not provide benefit credit for additional earnings taxed.
graph | table | pdf-graph | pdf-table | memo (Johnson, Brady, Ryan) (includes similar provisions with 3 percent and 4 percent payroll tax rates) |
0.25 | 0.30 | 9% | 6% | |
| E3.10 |
Beginning in 2023, apply 2 percent payroll tax rate on earnings over the
wage-indexed equivalent of $300,000 in 2017, with the threshold wage-indexed
after 2023. Provide proportional benefit credit for additional earnings
taxed, based on the payroll tax rate applied to the additional earnings
divided by the full 12.4 percent payroll tax rate.
graph | table | pdf-graph | pdf-table | memo (Johnson, Brady, Ryan) (includes similar provisions with 3 percent and 4 percent payroll tax rates) |
0.14 | 0.12 | 5% | 2% | |
| E3.11 |
Beginning in 2023, apply 2 percent payroll tax rate on earnings over the
wage-indexed equivalent of $300,000 in 2017, with the threshold wage-indexed
after 2023. Do not provide benefit credit for additional earnings taxed.
graph | table | pdf-graph | pdf-table | memo (Johnson, Brady, Ryan) (includes similar provisions with 3 percent and 4 percent payroll tax rates) |
0.19 | 0.22 | 7% | 5% | |
| E3.12 |
Beginning in 2023, apply 2 percent payroll tax rate on earnings over the
wage-indexed equivalent of $400,000 in 2017, with the threshold wage-indexed
after 2023. Provide proportional benefit credit for additional earnings taxed,
based on the payroll tax rate applied to the additional earnings divided by the
full 12.4 percent payroll tax rate.
graph | table | pdf-graph | pdf-table | memo (Johnson, Brady, Ryan) (includes similar provisions with 3 percent and 4 percent payroll tax rates) |
0.12 | 0.09 | 4% | 2% | |
| E3.13 |
Beginning in 2023, apply 2 percent payroll tax rate on earnings over the
wage-indexed equivalent of $400,000 in 2017, with the threshold wage-indexed
after 2023. Do not provide benefit credit for additional earnings taxed.
graph | table | pdf-graph | pdf-table | memo (Johnson, Brady, Ryan) (includes similar provisions with 3 percent and 4 percent payroll tax rates) |
0.15 | 0.18 | 6% | 4% | |
| E3.14 |
Eliminate the taxable maximum for the employer payroll tax (6.2 percent)
beginning in 2016. For the employee payroll tax (6.2 percent) and for
benefit credit purposes, beginning in 2016, 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 | 1.38 | 54% | 30% | |
| E3.15 |
Increase the taxable maximum such that 90 percent of earnings are subject
to the payroll tax (phased in 2016-2025). In addition, apply a tax rate of
6.2 percent for earnings above the revised taxable maximum (phased in from
2016-2025). Provide benefit credit for earnings taxed up to the revised
taxable maximum.
graph | table | pdf-graph | pdf-table | memo (Senate Special Committee on Aging) |
1.40 | 1.34 | 52% | 29% | |
| E3.16 |
Beginning in 2017, apply 4 percent payroll tax rate on earnings above the
wage-indexed equivalent of $400,000 in 2015, with the threshold wage-indexed
after 2017. Provide benefit credit for additional earnings taxed, using a
secondary PIA formula. This secondary PIA formula involves: (1) an "AIME+"
derived from annual earnings taxed only between 2015 wage-indexed equivalents
of $400,000 and $500,000 (with thresholds wage-indexed after 2017); and (2) a
formula factor of 2 percent on this newly computed "AIME+".
graph | table | pdf-graph | pdf-table | memo (Begich, Murray) |
0.32 | 0.34 | 12% | 7% | |
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