Summary Measures and Graphs

Description of Proposed Provision:
E3.16: Beginning in 2025, apply 4 percent payroll tax rate on earnings above the wage-indexed equivalent of $400,000 in 2015 (about $589,500 in 2025), with the threshold wage-indexed after 2025. Provide benefit credit for additional earnings taxed, using a secondary PIA formula. This secondary PIA formula involves: (1) an "AIME+" derived from annual earnings taxed only between 2015 wage-indexed equivalents of $400,000 and $500,000, or about $589,500 and $736,800 in 2025 (with thresholds wage-indexed after 2025); and (2) a formula factor of 2 percent on this newly computed "AIME+".

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 0.32 0.33 9% 8%

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.