Description of Proposed Provisions:
Provisions Affecting Coverage of Employment or Earnings
Estimates based on the intermediate assumptions of
the 2017 Trustees Report
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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 |
|||
Current law shortfall in long-range actuarial balance is 2.83 percent of payroll and in annual balance for the 75th year is 4.48 percent of payroll. | ||||||
F1 |
Starting in 2018, cover newly hired State and local government employees.
graph | table | pdf-graph | pdf-table | memo (Fiscal Commission) | memo (Bipartisan Policy Center 2010) | memo (Warshawsky) | memo (Social Security Advisory Board) |
0.17 | -0.18 | 6% | -4% | |
F2 |
Starting in 2018, exempt individuals with more than 180 quarters of
coverage from the OASDI payroll tax. Earnings exempted from OASDI
payroll tax would not be used in computing benefits.
graph | table | pdf-graph | pdf-table | memo (Warshawsky) |
-0.52 | -0.71 | -18% | -16% | |
F3 |
Expand covered earnings to include employer and employee premiums for
employer-sponsored group health insurance (ESI). Starting in 2021, phase
out the OASDI payroll tax exclusion for ESI premiums. Set an exclusion
level at the 75th percentile of premium distribution in 2021, with amounts
above that subject to the payroll tax. Reduce the exclusion level each
year by 10 percent of the 2021 exclusion level until fully eliminated in
2031. Eliminate the excise tax on ESI premiums starting in 2021.
graph | table | pdf-graph | pdf-table | memo (Bipartisan Policy Center 2010) |
0.94 | 0.66 | 33% | 15% | |
F4 |
Expand covered earnings to include contributions to voluntary salary
reduction plans (such as Cafeteria 125 plans and Flexible Spending
Accounts). Starting in 2018, subject these contributions to the OASDI
payroll tax, making the payroll tax treatment of these contributions
like 401(k) contributions.
graph | table | pdf-graph | pdf-table | memo (Bipartisan Policy Center 2010) |
0.28 | 0.17 | 10% | 4% | |
F5 |
Tax Reform for Business: Establish a value added tax of 3.0 percent
for 2019 and 6.5 percent for 2020 and later. Starting in 2019, reduce the
corporate income tax rate from 35 to 27 percent.
graph | table | pdf-graph | pdf-table | memo (Bipartisan Policy Center 2010) |
-0.02 | 0.17 | -1% | 4% | |
F6 |
Apply a 6.2 percent tax on investment income as defined in the Affordable
Care Act (ACA), with unindexed thresholds as in the ACA ($200,000 for single
filer, $250,000 for married filing jointly), starting in 2019. Proceeds go to
the OASDI Trust Fund.
graph | table | pdf-graph | pdf-table | memo (Sanders, DeFazio) | memo (Sanders 2016) | memo (Sanders 2015) |
0.94 | 1.16 | 33% | 26% |