Description of Proposed Provision:
E3.16: Beginning in 2019, apply 4 percent payroll tax rate on earnings above the wage-indexed equivalent of $400,000 in 2015 (about $457,200 in 2019), with the threshold wage-indexed after 2019. 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 $457,200 and $571,500 in 2019 (with thresholds wage-indexed after 2019); 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 |
|||
| 2017 | 13.41 | 13.03 | -0.38 | 298 | 0.00 | 0.00 | 0.00 | ||
| 2018 | 13.49 | 12.93 | -0.56 | 287 | 0.00 | 0.00 | 0.00 | ||
| 2019 | 13.70 | 13.23 | -0.46 | 273 | 0.00 | 0.29 | 0.29 | ||
| 2020 | 13.85 | 13.27 | -0.59 | 261 | -0.00 | 0.30 | 0.31 | ||
| 2021 | 14.02 | 13.30 | -0.72 | 249 | -0.00 | 0.31 | 0.31 | ||
| 2022 | 14.25 | 13.33 | -0.93 | 236 | -0.00 | 0.31 | 0.31 | ||
| 2023 | 14.54 | 13.35 | -1.19 | 223 | -0.00 | 0.30 | 0.31 | ||
| 2024 | 14.83 | 13.39 | -1.44 | 209 | -0.00 | 0.30 | 0.31 | ||
| 2025 | 15.10 | 13.41 | -1.69 | 194 | -0.00 | 0.30 | 0.31 | ||
| 2026 | 15.37 | 13.44 | -1.93 | 178 | -0.00 | 0.30 | 0.30 | ||
| 2027 | 15.62 | 13.46 | -2.16 | 163 | -0.00 | 0.30 | 0.31 | ||
| 2028 | 15.85 | 13.47 | -2.38 | 146 | -0.00 | 0.30 | 0.31 | ||
| 2029 | 16.06 | 13.49 | -2.58 | 130 | -0.00 | 0.30 | 0.31 | ||
| 2030 | 16.26 | 13.50 | -2.76 | 114 | -0.00 | 0.30 | 0.31 | ||
| 2031 | 16.45 | 13.51 | -2.93 | 97 | -0.00 | 0.30 | 0.31 | ||
| 2032 | 16.60 | 13.52 | -3.08 | 80 | -0.00 | 0.30 | 0.31 | ||
| 2033 | 16.74 | 13.53 | -3.21 | 62 | -0.00 | 0.31 | 0.31 | ||
| 2034 | 16.85 | 13.54 | -3.31 | 44 | -0.00 | 0.31 | 0.31 | ||
| 2035 | 16.92 | 13.55 | -3.38 | 25 | -0.00 | 0.31 | 0.31 | ||
| 2036 | 16.99 | 13.55 | -3.44 | 5 | -0.00 | 0.31 | 0.31 | ||
| 2037 | 17.02 | 13.55 | -3.46 | ---- | -0.00 | 0.31 | 0.31 | ||
| 2038 | 17.02 | 13.55 | -3.46 | ---- | -0.00 | 0.31 | 0.31 | ||
| 2039 | 16.99 | 13.55 | -3.44 | ---- | -0.00 | 0.31 | 0.31 | ||
| 2040 | 16.96 | 13.55 | -3.40 | ---- | -0.00 | 0.31 | 0.31 | ||
| 2041 | 16.91 | 13.55 | -3.36 | ---- | -0.00 | 0.31 | 0.31 | ||
| 2042 | 16.86 | 13.55 | -3.31 | ---- | -0.00 | 0.31 | 0.31 | ||
| 2043 | 16.80 | 13.55 | -3.26 | ---- | -0.00 | 0.31 | 0.31 | ||
| 2044 | 16.75 | 13.55 | -3.21 | ---- | -0.00 | 0.31 | 0.31 | ||
| 2045 | 16.71 | 13.54 | -3.17 | ---- | -0.00 | 0.31 | 0.31 | ||
| 2046 | 16.67 | 13.54 | -3.13 | ---- | -0.01 | 0.31 | 0.31 | ||
| 2047 | 16.64 | 13.54 | -3.10 | ---- | -0.01 | 0.31 | 0.31 | ||
| 2048 | 16.61 | 13.54 | -3.07 | ---- | -0.01 | 0.31 | 0.31 | ||
| 2049 | 16.58 | 13.54 | -3.04 | ---- | -0.01 | 0.31 | 0.31 | ||
| 2050 | 16.56 | 13.54 | -3.02 | ---- | -0.01 | 0.31 | 0.31 | ||
| 2051 | 16.55 | 13.54 | -3.01 | ---- | -0.01 | 0.31 | 0.31 | ||
| 2052 | 16.55 | 13.54 | -3.01 | ---- | -0.01 | 0.31 | 0.31 | ||
| 2053 | 16.56 | 13.54 | -3.02 | ---- | -0.01 | 0.31 | 0.31 | ||
| 2054 | 16.58 | 13.54 | -3.04 | ---- | -0.01 | 0.31 | 0.32 | ||
| 2055 | 16.61 | 13.55 | -3.07 | ---- | -0.01 | 0.31 | 0.32 | ||
| 2056 | 16.65 | 13.55 | -3.10 | ---- | -0.01 | 0.31 | 0.32 | ||
| 2057 | 16.69 | 13.55 | -3.14 | ---- | -0.01 | 0.31 | 0.32 | ||
| 2058 | 16.73 | 13.55 | -3.18 | ---- | -0.01 | 0.31 | 0.32 | ||
| 2059 | 16.78 | 13.56 | -3.22 | ---- | -0.01 | 0.31 | 0.32 | ||
| 2060 | 16.82 | 13.56 | -3.26 | ---- | -0.01 | 0.31 | 0.32 | ||
| 2061 | 16.87 | 13.56 | -3.30 | ---- | -0.01 | 0.31 | 0.32 | ||
| 2062 | 16.91 | 13.57 | -3.34 | ---- | -0.01 | 0.31 | 0.32 | ||
| 2063 | 16.96 | 13.57 | -3.39 | ---- | -0.01 | 0.31 | 0.32 | ||
| 2064 | 17.01 | 13.57 | -3.43 | ---- | -0.01 | 0.31 | 0.32 | ||
| 2065 | 17.06 | 13.58 | -3.48 | ---- | -0.01 | 0.31 | 0.32 | ||
| 2066 | 17.11 | 13.58 | -3.53 | ---- | -0.01 | 0.31 | 0.32 | ||
| 2067 | 17.16 | 13.58 | -3.57 | ---- | -0.01 | 0.31 | 0.32 | ||
| 2068 | 17.21 | 13.59 | -3.62 | ---- | -0.01 | 0.31 | 0.32 | ||
| 2069 | 17.26 | 13.59 | -3.67 | ---- | -0.01 | 0.31 | 0.32 | ||
| 2070 | 17.32 | 13.60 | -3.72 | ---- | -0.01 | 0.31 | 0.32 | ||
| 2071 | 17.36 | 13.60 | -3.76 | ---- | -0.01 | 0.31 | 0.32 | ||
| 2072 | 17.40 | 13.60 | -3.80 | ---- | -0.01 | 0.31 | 0.32 | ||
| 2073 | 17.44 | 13.60 | -3.83 | ---- | -0.01 | 0.31 | 0.32 | ||
| 2074 | 17.47 | 13.61 | -3.86 | ---- | -0.01 | 0.31 | 0.32 | ||
| 2075 | 17.49 | 13.61 | -3.88 | ---- | -0.01 | 0.31 | 0.32 | ||
| 2076 | 17.51 | 13.61 | -3.90 | ---- | -0.01 | 0.31 | 0.32 | ||
| 2077 | 17.51 | 13.61 | -3.90 | ---- | -0.01 | 0.31 | 0.32 | ||
| 2078 | 17.51 | 13.61 | -3.90 | ---- | -0.01 | 0.31 | 0.32 | ||
| 2079 | 17.51 | 13.61 | -3.89 | ---- | -0.01 | 0.31 | 0.32 | ||
| 2080 | 17.50 | 13.61 | -3.89 | ---- | -0.01 | 0.31 | 0.32 | ||
| 2081 | 17.49 | 13.61 | -3.88 | ---- | -0.01 | 0.31 | 0.32 | ||
| 2082 | 17.49 | 13.61 | -3.88 | ---- | -0.01 | 0.31 | 0.32 | ||
| 2083 | 17.50 | 13.61 | -3.89 | ---- | -0.01 | 0.31 | 0.33 | ||
| 2084 | 17.52 | 13.61 | -3.90 | ---- | -0.01 | 0.31 | 0.33 | ||
| 2085 | 17.54 | 13.61 | -3.93 | ---- | -0.01 | 0.31 | 0.33 | ||
| 2086 | 17.57 | 13.62 | -3.95 | ---- | -0.01 | 0.31 | 0.33 | ||
| 2087 | 17.61 | 13.62 | -3.99 | ---- | -0.01 | 0.31 | 0.33 | ||
| 2088 | 17.65 | 13.62 | -4.02 | ---- | -0.01 | 0.31 | 0.33 | ||
| 2089 | 17.69 | 13.62 | -4.07 | ---- | -0.01 | 0.32 | 0.33 | ||
| 2090 | 17.74 | 13.63 | -4.11 | ---- | -0.01 | 0.32 | 0.33 | ||
| 2091 | 17.78 | 13.63 | -4.15 | ---- | -0.01 | 0.32 | 0.33 | ||
| 2092 | 17.83 | 13.63 | -4.20 | ---- | -0.01 | 0.32 | 0.33 | ||
Summarized Estimates
| Proposal | Change from Current Law | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| Years | Cost rate |
Income rate |
Actuarial balance |
Year of reserve depletion1 |
Cost rate |
Income rate |
Actuarial balance |
||
| 2017-2091 | 16.66% | 14.14% | -2.52% | 2036 | -0.01% | 0.30% | 0.30% | ||
1 Under current law, the year of Trust Fund reserve depletion is 2034. |
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Based on Intermediate Assumptions of the 2017 Trustees Report.