Uncapping the Payroll Tax Would Raise the Top Marginal Tax Rate on Wages to Above 60 Percent in Some States

Social Security’s trust fund is nearing insolvency. The latest trustees report projects that the Old-Age and Survivors Insurance Trust Fund will run out in late 2032. If this occurs, benefits paid will be limited to payroll tax revenue, resulting in a roughly 22 percent benefit cut. Some lawmakers have suggested eliminating the payroll tax cap to help close the gap. This would raise revenue, but it would push top marginal tax rates on wages to over 60 percent in some states. The post Uncapping the Payroll Tax Would Raise the Top Marginal Tax Rate on Wages to Above 60 Percent in Some States app