Description of Proposed Provision:
E3.12: Beginning in 2025, apply 2 percent payroll tax rate on earnings over the wage-indexed equivalent of $400,000 in 2017 (about $548,700 in 2025), with the threshold wage-indexed after 2025. 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.
Financial Estimates for the OASDI Trust Fund Program
| Proposal | Change from Current Law | ||||||||
|---|---|---|---|---|---|---|---|---|---|
|
Expressed as a percentage of current-law taxable payroll |
Trust fund ratio as of January 1 |
Expressed as a percentage of current-law taxable payroll |
|||||||
|
Calendar year |
Cost rate |
Income rate |
Annual balance |
Cost rate |
Income rate |
Annual balance |
|||
| 2017 | 13.41 | 13.03 | -0.38 | 298 | 0.00 | 0.00 | 0.00 | ||
| 2018 | 13.49 | 12.93 | -0.56 | 287 | 0.00 | 0.00 | 0.00 | ||
| 2019 | 13.70 | 12.95 | -0.75 | 273 | 0.00 | 0.00 | 0.00 | ||
| 2020 | 13.85 | 12.96 | -0.89 | 259 | 0.00 | 0.00 | 0.00 | ||
| 2021 | 14.02 | 12.99 | -1.03 | 245 | 0.00 | 0.00 | 0.00 | ||
| 2022 | 14.26 | 13.02 | -1.23 | 230 | 0.00 | 0.00 | 0.00 | ||
| 2023 | 14.54 | 13.05 | -1.50 | 215 | 0.00 | 0.00 | 0.00 | ||
| 2024 | 14.83 | 13.08 | -1.74 | 199 | 0.00 | 0.00 | 0.00 | ||
| 2025 | 15.10 | 13.26 | -1.84 | 182 | 0.00 | 0.16 | 0.16 | ||
| 2026 | 15.37 | 13.30 | -2.07 | 166 | -0.00 | 0.17 | 0.17 | ||
| 2027 | 15.62 | 13.32 | -2.30 | 150 | -0.00 | 0.17 | 0.17 | ||
| 2028 | 15.85 | 13.33 | -2.52 | 133 | 0.00 | 0.17 | 0.17 | ||
| 2029 | 16.07 | 13.35 | -2.72 | 116 | 0.00 | 0.17 | 0.17 | ||
| 2030 | 16.27 | 13.36 | -2.90 | 99 | 0.00 | 0.17 | 0.17 | ||
| 2031 | 16.45 | 13.38 | -3.07 | 81 | 0.00 | 0.17 | 0.17 | ||
| 2032 | 16.61 | 13.39 | -3.22 | 63 | 0.00 | 0.17 | 0.17 | ||
| 2033 | 16.74 | 13.40 | -3.35 | 45 | 0.00 | 0.17 | 0.16 | ||
| 2034 | 16.85 | 13.40 | -3.45 | 25 | 0.00 | 0.17 | 0.16 | ||
| 2035 | 16.93 | 13.41 | -3.52 | 6 | 0.01 | 0.17 | 0.16 | ||
| 2036 | 17.00 | 13.41 | -3.58 | ---- | 0.01 | 0.17 | 0.16 | ||
| 2037 | 17.03 | 13.42 | -3.61 | ---- | 0.01 | 0.17 | 0.16 | ||
| 2038 | 17.03 | 13.42 | -3.61 | ---- | 0.01 | 0.17 | 0.16 | ||
| 2039 | 17.01 | 13.42 | -3.59 | ---- | 0.01 | 0.17 | 0.16 | ||
| 2040 | 16.97 | 13.42 | -3.56 | ---- | 0.01 | 0.17 | 0.16 | ||
| 2041 | 16.93 | 13.42 | -3.51 | ---- | 0.01 | 0.17 | 0.16 | ||
| 2042 | 16.88 | 13.41 | -3.46 | ---- | 0.02 | 0.17 | 0.16 | ||
| 2043 | 16.82 | 13.41 | -3.41 | ---- | 0.02 | 0.17 | 0.15 | ||
| 2044 | 16.78 | 13.41 | -3.37 | ---- | 0.02 | 0.17 | 0.15 | ||
| 2045 | 16.74 | 13.41 | -3.33 | ---- | 0.02 | 0.17 | 0.15 | ||
| 2046 | 16.70 | 13.41 | -3.29 | ---- | 0.02 | 0.17 | 0.15 | ||
| 2047 | 16.67 | 13.41 | -3.26 | ---- | 0.02 | 0.17 | 0.15 | ||
| 2048 | 16.64 | 13.41 | -3.24 | ---- | 0.03 | 0.17 | 0.15 | ||
| 2049 | 16.62 | 13.40 | -3.21 | ---- | 0.03 | 0.17 | 0.14 | ||
| 2050 | 16.60 | 13.40 | -3.19 | ---- | 0.03 | 0.17 | 0.14 | ||
| 2051 | 16.59 | 13.40 | -3.18 | ---- | 0.03 | 0.17 | 0.14 | ||
| 2052 | 16.59 | 13.41 | -3.18 | ---- | 0.03 | 0.17 | 0.14 | ||
| 2053 | 16.60 | 13.41 | -3.20 | ---- | 0.04 | 0.17 | 0.14 | ||
| 2054 | 16.63 | 13.41 | -3.22 | ---- | 0.04 | 0.17 | 0.14 | ||
| 2055 | 16.66 | 13.41 | -3.25 | ---- | 0.04 | 0.17 | 0.13 | ||
| 2056 | 16.70 | 13.41 | -3.28 | ---- | 0.04 | 0.17 | 0.13 | ||
| 2057 | 16.74 | 13.42 | -3.32 | ---- | 0.04 | 0.18 | 0.13 | ||
| 2058 | 16.79 | 13.42 | -3.37 | ---- | 0.05 | 0.18 | 0.13 | ||
| 2059 | 16.83 | 13.43 | -3.41 | ---- | 0.05 | 0.18 | 0.13 | ||
| 2060 | 16.88 | 13.43 | -3.45 | ---- | 0.05 | 0.18 | 0.12 | ||
| 2061 | 16.93 | 13.43 | -3.50 | ---- | 0.05 | 0.18 | 0.12 | ||
| 2062 | 16.98 | 13.44 | -3.54 | ---- | 0.06 | 0.18 | 0.12 | ||
| 2063 | 17.03 | 13.44 | -3.59 | ---- | 0.06 | 0.18 | 0.12 | ||
| 2064 | 17.08 | 13.44 | -3.63 | ---- | 0.06 | 0.18 | 0.12 | ||
| 2065 | 17.13 | 13.45 | -3.68 | ---- | 0.06 | 0.18 | 0.12 | ||
| 2066 | 17.18 | 13.45 | -3.73 | ---- | 0.06 | 0.18 | 0.11 | ||
| 2067 | 17.24 | 13.45 | -3.78 | ---- | 0.07 | 0.18 | 0.11 | ||
| 2068 | 17.29 | 13.46 | -3.83 | ---- | 0.07 | 0.18 | 0.11 | ||
| 2069 | 17.35 | 13.46 | -3.88 | ---- | 0.07 | 0.18 | 0.11 | ||
| 2070 | 17.40 | 13.46 | -3.93 | ---- | 0.07 | 0.18 | 0.11 | ||
| 2071 | 17.45 | 13.47 | -3.98 | ---- | 0.07 | 0.18 | 0.11 | ||
| 2072 | 17.49 | 13.47 | -4.02 | ---- | 0.08 | 0.18 | 0.10 | ||
| 2073 | 17.53 | 13.47 | -4.05 | ---- | 0.08 | 0.18 | 0.10 | ||
| 2074 | 17.56 | 13.48 | -4.08 | ---- | 0.08 | 0.18 | 0.10 | ||
| 2075 | 17.58 | 13.48 | -4.11 | ---- | 0.08 | 0.18 | 0.10 | ||
| 2076 | 17.60 | 13.48 | -4.12 | ---- | 0.08 | 0.18 | 0.10 | ||
| 2077 | 17.61 | 13.48 | -4.13 | ---- | 0.08 | 0.18 | 0.10 | ||
| 2078 | 17.61 | 13.48 | -4.13 | ---- | 0.08 | 0.18 | 0.10 | ||
| 2079 | 17.60 | 13.48 | -4.12 | ---- | 0.08 | 0.18 | 0.10 | ||
| 2080 | 17.60 | 13.48 | -4.11 | ---- | 0.08 | 0.18 | 0.10 | ||
| 2081 | 17.59 | 13.48 | -4.11 | ---- | 0.09 | 0.18 | 0.10 | ||
| 2082 | 17.59 | 13.48 | -4.11 | ---- | 0.09 | 0.18 | 0.10 | ||
| 2083 | 17.60 | 13.48 | -4.12 | ---- | 0.09 | 0.18 | 0.10 | ||
| 2084 | 17.61 | 13.48 | -4.13 | ---- | 0.09 | 0.18 | 0.10 | ||
| 2085 | 17.64 | 13.48 | -4.15 | ---- | 0.09 | 0.18 | 0.10 | ||
| 2086 | 17.67 | 13.48 | -4.18 | ---- | 0.09 | 0.18 | 0.10 | ||
| 2087 | 17.70 | 13.49 | -4.22 | ---- | 0.09 | 0.18 | 0.10 | ||
| 2088 | 17.75 | 13.49 | -4.26 | ---- | 0.09 | 0.18 | 0.10 | ||
| 2089 | 17.79 | 13.49 | -4.30 | ---- | 0.09 | 0.18 | 0.10 | ||
| 2090 | 17.84 | 13.50 | -4.34 | ---- | 0.09 | 0.18 | 0.09 | ||
| 2091 | 17.89 | 13.50 | -4.39 | ---- | 0.09 | 0.18 | 0.09 | ||
| 2092 | 17.93 | 13.50 | -4.43 | ---- | 0.09 | 0.18 | 0.09 | ||
Summarized Estimates
| Proposal | Change from Current Law | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| Years | Cost rate |
Income rate |
Actuarial balance |
Year of reserve depletion1 |
Cost rate |
Income rate |
Actuarial balance |
||
| 2017-2091 | 16.70% | 13.99% | -2.71% | 2035 | 0.04% | 0.15% | 0.12% | ||
1 Under current law, the year of Trust Fund reserve depletion is 2034. |
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Based on Intermediate Assumptions of the 2017 Trustees Report.