Summary Measures and Graphs
Description of Proposed Provision:
E2.18: Apply the combined OASDI payroll tax rate on covered earnings above $400,000 paid in 2025 and later, and tax all covered earnings once the current-law taxable maximum exceeds $400,000. Increase the computed level of the AWI for years after 2024 by amounts ranging from 0.5 percent for 2025 to 0.9 percent for 2047 and later. Credit the additional earnings taxed for benefit purposes by: (a) calculating a second average indexed monthly earnings ("AIME+") reflecting only earnings taxed above the current-law taxable maximum, (b) applying a 1 percent factor on this newly computed "AIME+" to develop a second component of the PIA, and (c) adding this second component to the current-law PIA.
Estimates based on the intermediate assumptions
of the 2023 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 |
||
| -3.61 | -4.35 | 2.16 | 2.47 | 60% | 57% | ||
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