Description of Proposed Provision:
E3.16: Beginning in 2021, apply 4 percent payroll tax rate on earnings above the wage-indexed equivalent of $400,000 in 2015 (about $480,000 in 2021), with the threshold wage-indexed after 2021. 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 $480,000 and $600,000 in 2021 (with thresholds wage-indexed after 2021); 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
202114.0913.19-0.89
245
0.000.300.30
202214.2313.23-1.00
231
-0.000.310.31
202314.4013.25-1.15
217
-0.000.310.31
202414.5913.28-1.31
203
-0.000.310.31
202514.7813.29-1.49
188
-0.000.310.31
202614.9913.42-1.57
173
-0.000.310.31
202715.1913.44-1.75
158
-0.000.300.31
202815.4313.48-1.95
143
-0.000.300.30
202915.6213.49-2.13
128
-0.000.300.30
203015.8013.51-2.30
113
-0.000.300.31
203115.9613.52-2.44
98
-0.000.300.31
203216.1113.53-2.58
83
-0.000.300.31
203316.2313.54-2.69
67
-0.000.300.31
203416.3213.55-2.77
52
-0.000.300.31
203516.4013.56-2.84
35
-0.000.300.31
203616.4613.56-2.90
19
-0.000.300.31
203716.5213.57-2.95
2
-0.000.300.31
203816.5613.57-2.99
----
-0.000.310.31
203916.6013.58-3.02
----
-0.000.310.31
204016.6113.58-3.03
----
-0.000.310.31
204116.6113.58-3.03
----
-0.000.310.31
204216.5913.58-3.01
----
-0.000.310.31
204316.5513.58-2.97
----
-0.000.310.31
204416.5213.58-2.94
----
-0.000.310.31
204516.4813.58-2.91
----
-0.000.310.31
204616.4513.58-2.87
----
-0.000.310.31
204716.4213.58-2.84
----
-0.000.310.31
204816.4013.58-2.82
----
-0.000.310.31
204916.3813.58-2.80
----
-0.010.310.31
205016.3613.58-2.79
----
-0.010.310.31
205116.3613.58-2.78
----
-0.010.310.31
205216.3613.58-2.78
----
-0.010.310.31
205316.3713.58-2.79
----
-0.010.310.31
205416.3813.58-2.80
----
-0.010.310.31
205516.4013.58-2.82
----
-0.010.310.31
205616.4313.59-2.85
----
-0.010.310.31
205716.4713.59-2.88
----
-0.010.310.31
205816.5213.60-2.92
----
-0.010.310.31
205916.5713.60-2.97
----
-0.010.310.32
206016.6213.60-3.02
----
-0.010.310.32
206116.6713.61-3.06
----
-0.010.310.32
206216.7313.61-3.11
----
-0.010.310.32
206316.7813.62-3.16
----
-0.010.310.32
206416.8313.62-3.21
----
-0.010.310.32
206516.8913.62-3.26
----
-0.010.310.32
206616.9413.63-3.32
----
-0.010.310.32
206717.0013.63-3.37
----
-0.010.310.32
206817.0613.64-3.43
----
-0.010.310.32
206917.1213.64-3.48
----
-0.010.310.32
207017.1813.65-3.54
----
-0.010.310.32
207117.2413.65-3.59
----
-0.010.310.32
207217.2913.65-3.64
----
-0.010.310.32
207317.3413.66-3.68
----
-0.010.310.32
207417.3813.66-3.72
----
-0.010.310.32
207517.4213.67-3.75
----
-0.010.310.32
207617.4513.67-3.78
----
-0.010.310.32
207717.4713.67-3.80
----
-0.010.310.32
207817.4713.67-3.80
----
-0.010.310.32
207917.4713.67-3.80
----
-0.010.310.32
208017.4513.67-3.78
----
-0.010.310.32
208117.4313.67-3.76
----
-0.010.310.32
208217.4113.67-3.74
----
-0.010.310.32
208317.3913.67-3.72
----
-0.010.310.32
208417.3713.67-3.70
----
-0.010.310.32
208517.3413.67-3.68
----
-0.010.310.32
208617.3313.66-3.66
----
-0.010.310.32
208717.3213.66-3.65
----
-0.010.310.32
208817.3213.66-3.65
----
-0.010.310.32
208917.3313.66-3.66
----
-0.010.310.32
209017.3513.67-3.68
----
-0.010.310.32
209117.3813.67-3.71
----
-0.010.310.32
209217.4213.67-3.75
----
-0.010.310.32
209317.4613.67-3.79
----
-0.010.310.32
209417.5113.68-3.83
----
-0.010.310.32


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 16.59% 14.11% -2.48%
2037
-0.01% 0.30% 0.30%

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