Summary Measures and Graphs

Description of Proposed Provision:
E2.11: Eliminate the taxable maximum in years 2026 and later. Phase in elimination by taxing all earnings above the current-law taxable maximum at: 2.48 percent in 2022, 4.96 percent in 2023, and so on, up to 12.40 percent in 2026. 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 2020 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+".

Estimates based on the intermediate assumptions of the 2020 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
-3.21 -4.51 2.08 2.14 65% 47%

graph of OASDI cost rates and income rates by year, under current law and provision. click on graph to view underlying data. graph of OASDI trust fund ratio by year, under current law and provision. click on graph to view underlying data.