Summary Measures and Graphs

Description of Proposed Provision:
E2.4: Eliminate the taxable maximum for years 2029 and later (phased in 2023-2029), 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 2022 that were in excess of that year's current-law taxable maximum; (2) a new bend point equal to $8,933 in 2023, indexed by wages after 2023; and (3) formula factors of 3 percent and 0.25 percent below and above the new bend point, respectively.

Estimates based on the intermediate assumptions of the 2022 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
-3.42 -4.25 2.39 2.50 70% 59%

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.