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Summary Measures and Graphs
Payroll Taxes (including maximum taxable)

Description of Proposed Provision:
Eliminate the taxable maximum for years 2018 and later (phased in 2012-2017), and apply full 12.4 percent payroll tax rate to all earnings. Provide benefit credit for earnings above the current-law taxable maximum that were taxed after 2011, using a secondary PIA formula. This secondary PIA formula uses: (1) an “AIME+” derived from annual earnings from each year after 2011 that were in excess of that year’s current-law taxable maximum; (2) a bend point equal to 134 percent higher of the monthly current-law taxable maximum; and (3) formula factors of 3 percent and 0.25 percent, respectively.

Estimates based on the intermediate assumptions of the 2011 Trustees Report

Summary Measures
[As a percentage of taxable payroll]
Present Law Change from present law Results with this provision
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
-2.22 -4.24 2.16 2.37 -0.06 -1.88


graph of OASDI cost rates and income rates by year, under present law and provision. click on graph to view underlying data. graph of OASDI trust fund ratio by year, under present law and provision. click on graph to view underlying data.
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Last reviewed or modified February 22, 2013