Distributional Effects of Raising the Social Security Payroll Tax

by Dave Shoffner
Policy Brief No. 2010-01 (released April 2010)
Table equivalent for Chart 1. Social Security payroll tax rates under alternative policy options, 2006–2080
Year Immediate increase Phased increases As-needed increases
2006 14.4 12.4 12.4
2007 14.4 12.4 12.4
2008 14.4 12.4 12.4
2009 14.4 12.4 12.4
2010 14.4 12.4 12.4
2011 14.4 12.4 12.4
2012 14.4 12.4 12.4
2013 14.4 12.4 12.4
2014 14.4 12.4 12.4
2015 14.4 12.4 12.4
2016 14.4 12.4 12.4
2017 14.4 12.4 12.4
2018 14.4 12.4 12.4
2019 14.4 12.4 12.4
2020 14.4 14.5 12.4
2021 14.4 14.5 12.4
2022 14.4 14.5 12.4
2023 14.4 14.5 12.4
2024 14.4 14.5 12.4
2025 14.4 14.5 12.4
2026 14.4 14.5 12.4
2027 14.4 14.5 12.4
2028 14.4 14.5 12.4
2029 14.4 14.5 12.4
2030 14.4 14.5 12.4
2031 14.4 14.5 12.4
2032 14.4 14.5 12.4
2033 14.4 14.5 12.4
2034 14.4 14.5 12.4
2035 14.4 14.5 12.4
2036 14.4 14.5 12.4
2037 14.4 14.5 12.4
2038 14.4 14.5 12.4
2039 14.4 14.5 12.4
2040 14.4 14.5 12.4
2041 14.4 14.5 12.4
2042 14.4 14.5 15.2
2043 14.4 14.5 16.9
2044 14.4 14.5 16.9
2045 14.4 14.5 16.9
2046 14.4 14.5 16.9
2047 14.4 14.5 17.0
2048 14.4 14.5 17.0
2049 14.4 14.5 17.0
2050 14.4 16.6 17.0
2051 14.4 16.6 17.0
2052 14.4 16.6 17.1
2053 14.4 16.6 17.1
2054 14.4 16.6 17.2
2055 14.4 16.6 17.2
2056 14.4 16.6 17.3
2057 14.4 16.6 17.3
2058 14.4 16.6 17.4
2059 14.4 16.6 17.4
2060 14.4 16.6 17.5
2061 14.4 16.6 17.5
2062 14.4 16.6 17.6
2063 14.4 16.6 17.6
2064 14.4 16.6 17.7
2065 14.4 16.6 17.7
2066 14.4 16.6 17.8
2067 14.4 16.6 17.8
2068 14.4 16.6 17.9
2069 14.4 16.6 17.9
2070 14.4 16.6 18.0
2071 14.4 16.6 18.0
2072 14.4 16.6 18.1
2073 14.4 16.6 18.1
2074 14.4 16.6 18.1
2075 14.4 16.6 18.2
2076 14.4 16.6 18.2
2077 14.4 16.6 18.3
2078 14.4 16.6 18.3
2079 14.4 16.6 18.4
2080 14.4 16.6 18.4
 
Table equivalent for Chart 2. Percentage of covered workers with at least 1 year of higher Social Security payroll taxes under alternative policy options and for comparative scenario, by birth cohort
Birth Cohort Immediate increase Phased increases As-needed increases
1936–1940 32.5 4.9 0.0
1941–1945 57.0 9.8 0.0
1946–1950 78.3 20.7 0.0
1951–1955 87.6 37.3 0.0
1956–1960 91.4 62.2 0.1
1961–1965 93.4 80.1 0.4
1966–1970 95.2 88.3 1.0
1971–1975 97.9 93.9 17.3
1976–1980 99.6 96.2 52.5
1981–1985 99.8 98.5 78.1
1986–1990 99.9 99.4 88.5
1991–1995 99.8 99.6 93.8
1996–2000 99.9 99.9 96.7
2001–2005 99.9 99.9 98.0
2006–2010 99.8 99.8 98.9
2011–2015 99.9 99.9 99.6
 
Table equivalent for Chart 3. Percentage increase in total lifetime Social Security payroll taxes relative to current-law taxes, by policy option or scenario and birth cohort
Birth cohort Immediate increase Phased increases As-needed increases
1936–1940 0.3 0.0 0.0
1941–1945 0.7 0.1 0.0
1946–1950 1.7 0.2 0.0
1951–1955 2.9 0.3 0.0
1956–1960 4.4 0.8 0.0
1961–1965 6.4 1.9 0.0
1966–1970 8.8 3.5 0.1
1971–1975 11.2 5.6 0.4
1976–1980 13.3 7.9 1.4
1981–1985 15.2 10.4 3.4
1986–1990 16.1 13.3 6.7
1991–1995 16.2 16.6 10.9
1996–2000 16.2 20.0 15.6
2001–2005 16.2 22.6 20.9
2006–2010 16.2 24.8 26.6
2011–2015 16.2 27.1 32.7
 
Table equivalent for Chart 4. Median lifetime Social Security benefit/tax ratios under alternative policy options and for comparative scenario, by birth cohort
Birth Cohort Immediate increase Phased increases As-needed increases
1936–1940 102.2 102.4 102.4
1941–1945 88.0 88.7 88.8
1946–1950 82.0 83.2 83.4
1951–1955 78.0 80.1 80.3
1956–1960 76.6 79.4 80.0
1961–1965 77.8 81.3 82.8
1966–1970 82.1 86.2 89.0
1971–1975 81.9 86.1 90.7
1976–1980 85.3 89.5 94.9
1981–1985 85.5 89.4 95.0
1986–1990 85.9 88.2 92.8
1991–1995 84.6 84.3 88.5
1996–2000 87.1 84.6 87.0
2001–2005 87.8 83.3 84.4
2006–2010 88.5 82.5 80.7
2011–2015 89.0 81.7 78.2