Description of Proposed Provision:
E2.4: Eliminate the taxable maximum for years 2026 and later (phased in 2020-2026), and apply full 12.4 percent payroll tax rate to all earnings. 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 2019 that were in excess of that year's current-law taxable maximum; (2) a new bend point equal to 134 percent of the monthly current-law taxable maximum; and (3) formula factors of 3 percent and 0.25 percent below and above the new bend point, respectively.

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
202013.9413.21-0.73
260
0.000.340.34
202114.0913.60-0.49
247
-0.000.700.70
202214.2313.96-0.27
236
-0.001.041.04
202314.3914.30-0.09
227
-0.001.371.37
202414.5814.660.07
219
-0.001.691.69
202514.7814.990.20
213
-0.002.002.00
202614.9915.420.43
208
-0.002.312.31
202715.1915.450.26
205
-0.002.322.32
202815.4315.480.05
202
-0.002.312.31
202915.6215.50-0.12
199
-0.002.312.31
203015.8115.51-0.29
195
-0.002.312.31
203115.9715.53-0.44
192
0.002.312.31
203216.1115.54-0.57
188
0.002.312.31
203316.2315.55-0.68
184
0.002.312.31
203416.3315.56-0.77
181
0.002.312.31
203516.4015.57-0.84
178
0.012.322.31
203616.4715.57-0.89
174
0.012.322.31
203716.5315.58-0.95
170
0.012.322.31
203816.5815.59-0.99
165
0.012.322.31
203916.6115.59-1.02
161
0.012.322.31
204016.6315.59-1.04
156
0.012.322.31
204116.6315.59-1.03
152
0.012.322.31
204216.6115.60-1.01
147
0.022.322.31
204316.5715.60-0.98
143
0.022.322.31
204416.5415.60-0.94
139
0.022.322.31
204516.5115.60-0.91
135
0.022.322.31
204616.4715.60-0.88
131
0.022.332.30
204716.4515.60-0.85
127
0.022.332.30
204816.4315.60-0.83
123
0.022.332.30
204916.4115.60-0.81
119
0.032.332.30
205016.3915.60-0.79
115
0.032.332.30
205116.3915.60-0.79
112
0.032.332.30
205216.3915.60-0.79
108
0.032.332.30
205316.4015.61-0.80
104
0.032.332.30
205416.4215.61-0.81
100
0.032.332.30
205516.4415.61-0.83
96
0.032.332.30
205616.4715.62-0.86
92
0.032.332.30
205716.5115.62-0.90
87
0.032.342.30
205816.5615.62-0.94
83
0.042.342.30
205916.6115.63-0.98
78
0.042.342.30
206016.6715.63-1.03
72
0.042.342.30
206116.7215.64-1.08
67
0.042.342.30
206216.7715.64-1.13
61
0.042.342.30
206316.8315.65-1.18
55
0.042.342.30
206416.8815.65-1.23
48
0.042.342.30
206516.9415.66-1.28
42
0.042.342.30
206617.0015.66-1.33
35
0.042.342.30
206717.0615.67-1.39
27
0.042.342.30
206817.1215.68-1.44
19
0.042.352.30
206917.1815.68-1.50
11
0.042.352.30
207017.2415.69-1.55
3
0.052.352.30
207117.3015.69-1.61
----
0.052.352.30
207217.3515.70-1.65
----
0.052.352.30
207317.4015.70-1.70
----
0.052.352.30
207417.4415.70-1.73
----
0.052.352.30
207517.4815.71-1.77
----
0.052.352.30
207617.5115.71-1.80
----
0.052.352.31
207717.5315.72-1.81
----
0.052.362.31
207817.5315.72-1.82
----
0.052.362.31
207917.5315.72-1.81
----
0.052.362.31
208017.5115.72-1.79
----
0.052.362.31
208117.4915.72-1.78
----
0.052.362.31
208217.4715.72-1.75
----
0.052.362.31
208317.4515.72-1.73
----
0.052.362.31
208417.4315.72-1.71
----
0.052.362.31
208517.4115.72-1.69
----
0.052.362.31
208617.3915.72-1.67
----
0.052.372.31
208717.3815.72-1.66
----
0.052.372.32
208817.3815.72-1.66
----
0.052.372.32
208917.3915.72-1.67
----
0.052.372.32
209017.4115.72-1.69
----
0.052.372.32
209117.4415.73-1.71
----
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
----
0.052.382.32


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 16.62% 16.01% -0.61%
2070
0.03% 2.20% 2.18%

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