Description of Proposed Provision:
E2.13: Apply OASDI 12.4 percent payroll tax rate on earnings above $400,000 starting in 2021, and tax all earnings once the current-law taxable maximum exceeds $400,000. 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 2 percent on this newly computed "AIME+".

Estimates based on the intermediate assumptions of the 2019 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
-2.78 -4.11   1.91 2.32   68% 56%

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.