New Social Security 2100 Bill to Expand Payroll Tax Is Coming This Fall

As the National Committee to Preserve Social Security & Medicare explained recently, Larson's bill would pay for enhancements to Social Security by imposing payroll taxes on the highest earners.

Social Security contributions are currently capped at $142,800 in annual wages, the committee explained. "The new bill would reimpose the payroll tax after $400,000 in wages, bringing the program much-needed revenue — and honoring President Biden's pledge not to raise taxes on anyone earning under $400,000 a year."

Larson's bill also would prevent unnecessary field office closures and require the agency to mail annual statements to all workers 25 and older.

The Committee says Larson's bill:

• Increases benefits across the board for all Social Security beneficiaries;
• Improves the cost-of-living adjustment (COLA), so it reflects the inflation actually experienced by seniors;
• Ensures no one retires into poverty after a full career of work by improving benefits for long-serving, low-wage workers;
• Improves benefits for widows and widowers from two-income households; and
• Restores student benefits up to age 22 for the dependent children of disabled, deceased or retired workers.

"These are long-awaited improvements that Social Security beneficiaries need after years of flat incomes and rising living expenses," the Committee said.

In the 116th Congress, Larson introduced the Social Security 2100 Act, which would extend the life of the program's trust fund for most of the rest of this century, Max Richtman, president and CEO of the National Committee to Preserve Social Security & Medicare, explained in an April commentary for ThinkAdvisor.

"However, rather than cutting benefits, Larson wants to expand them, partly by asking the wealthy to begin contributing their fair share of Social Security payroll taxes," Richtman said.

Larson is currently seeking co-sponsors in the House for his revised bill. The previous legislation, the Social Security 2100 Act, had 208 co-sponsors.

Larson may introduce his revised bill in September, after the House returns from summer recess. However, introduction may get pushed back due to budget reconciliation and debt limit negotiations this month.