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+".

Financial Estimates for the OASDI Trust Fund Program

  Proposal   Change from Current Law
  Expressed as a percentage of
current-law taxable payroll

Trust fund
ratio as of
January 1
Expressed as a percentage of
current-law taxable payroll
Calendar
year
Cost
rate
Income
rate
Annual
balance

Cost
rate
Income
rate
Annual
balance
201913.9112.85-1.06
273
0.000.000.00
202013.9412.87-1.07
260
0.000.000.00
202114.0913.88-0.21
245
0.000.980.98
202214.2313.97-0.25
236
-0.001.051.06
202314.3914.02-0.37
227
-0.001.081.08
202414.5914.08-0.50
217
-0.001.111.11
202514.7914.13-0.65
207
-0.001.151.15
202614.9914.29-0.70
197
0.001.181.18
202715.1914.35-0.85
187
0.001.211.21
202815.4414.42-1.01
177
0.001.251.25
202915.6314.48-1.15
168
0.001.291.29
203015.8114.53-1.28
158
0.011.331.32
203115.9714.59-1.39
149
0.011.371.36
203216.1214.64-1.48
140
0.011.411.40
203316.2414.69-1.55
131
0.011.461.45
203416.3414.75-1.59
122
0.011.501.49
203516.4114.80-1.61
113
0.021.551.53
203616.4814.86-1.62
104
0.021.601.58
203716.5414.91-1.63
96
0.021.651.63
203816.5914.97-1.62
87
0.021.701.68
203916.6315.03-1.60
78
0.021.761.73
204016.6415.09-1.55
69
0.031.811.79
204116.6415.15-1.49
61
0.031.871.85
204216.6215.21-1.41
53
0.031.941.91
204316.5915.27-1.31
45
0.032.001.97
204416.5615.34-1.21
38
0.032.072.04
204516.5215.41-1.11
31
0.042.142.10
204616.4915.48-1.01
25
0.042.212.18
204716.4615.56-0.90
19
0.042.292.25
204816.4415.60-0.85
14
0.042.332.29
204916.4315.60-0.83
9
0.042.332.29
205016.4115.60-0.81
4
0.042.332.29
205116.4115.60-0.80
----
0.052.332.29
205216.4115.60-0.81
----
0.052.332.29
205316.4215.61-0.81
----
0.052.332.29
205416.4315.61-0.83
----
0.052.332.28
205516.4615.61-0.85
----
0.052.332.28
205616.4915.62-0.88
----
0.052.342.28
205716.5315.62-0.91
----
0.052.342.28
205816.5815.63-0.95
----
0.052.342.28
205916.6315.63-1.00
----
0.062.342.28
206016.6815.64-1.05
----
0.062.342.28
206116.7415.64-1.10
----
0.062.342.28
206216.7915.65-1.15
----
0.062.342.28
206316.8515.65-1.20
----
0.062.342.28
206416.9015.66-1.25
----
0.062.342.28
206516.9615.66-1.30
----
0.062.342.28
206617.0115.67-1.35
----
0.062.342.28
206717.0715.67-1.40
----
0.062.352.28
206817.1415.68-1.46
----
0.062.352.29
206917.2015.68-1.51
----
0.062.352.29
207017.2615.69-1.57
----
0.062.352.29
207117.3115.69-1.62
----
0.062.352.29
207217.3615.70-1.67
----
0.062.352.29
207317.4115.70-1.71
----
0.062.352.29
207417.4515.71-1.75
----
0.062.352.29
207517.4915.71-1.78
----
0.062.352.29
207617.5215.71-1.81
----
0.062.352.29
207717.5415.72-1.82
----
0.062.362.30
207817.5415.72-1.83
----
0.062.362.30
207917.5415.72-1.82
----
0.062.362.30
208017.5215.72-1.80
----
0.062.362.30
208117.5015.72-1.78
----
0.062.362.30
208217.4815.72-1.76
----
0.062.362.30
208317.4615.72-1.74
----
0.062.362.30
208417.4315.72-1.72
----
0.062.362.31
208517.4115.72-1.69
----
0.062.362.31
208617.3915.72-1.68
----
0.062.372.31
208717.3815.72-1.66
----
0.062.372.31
208817.3815.72-1.66
----
0.062.372.31
208917.3915.72-1.67
----
0.062.372.31
209017.4115.72-1.69
----
0.052.372.32
209117.4415.73-1.72
----
0.052.372.32
209217.4815.73-1.75
----
0.052.372.32
209317.5315.74-1.79
----
0.052.372.32
209417.5815.74-1.84
----
0.062.382.32


Summarized Estimates

  Proposal   Change from Current Law
Years Cost
rate
Income
rate
Actuarial
balance

Year of reserve
depletion
1

Cost
rate
Income
rate
Actuarial
balance
2019-2093 16.63% 15.76% -0.88%
2050
0.04% 1.94% 1.91%

1 Under current law, the year of Trust Fund reserve depletion is 2035.
Based on Intermediate Assumptions of the 2019 Trustees Report.