Updated

Updated · abcnews.com · Jul 2

Warren, Moreno Push to Lift $184,500 Social Security Tax Cap as 2032 Insolvency Nears

Updated

Updated · abcnews.com · Jul 2

Warren, Moreno Push to Lift $184,500 Social Security Tax Cap as 2032 Insolvency Nears

Q: Could the plan to save Social Security by taxing high earners ultimately cost the U.S. 1.8 million jobs?

Possibly, but that 1.8 million figure is an estimate from one economic model, not an established outcome. The Warren-Moreno idea would remove the Social Security payroll-tax cap, so earnings above $184,500 would also face the 12.4% tax. Supporters say that could raise about $3.4 trillion over 10 years and close more than half of Social Security’s funding gap, helping avoid automatic benefit cuts of roughly 22% to 25% if Congress does nothing. The claim that the policy could cost 1.8 million jobs comes from Tax Foundation analysis cited in related coverage. That model estimated the change could reduce long-run GDP by about 1.5% and lower employment by 1.8 million jobs. The argument is that much higher marginal tax rates on top earners, including some owners of pass-through businesses, could discourage work, investment and hiring. But that is not a consensus forecast. Other reporting on the proposal emphasizes the revenue gain and the fact that high earners currently stop paying Social Security tax after the wage cap, while middle-income workers pay it on all of their covered wages up to that limit. Some analysts also note that the exact economic effect would depend on how the policy is written, whether benefits are adjusted, and how employers and taxpayers respond. So the best answer is that the plan could carry job-loss risks under some models, but the 1.8 million number is a projection from critics’ analysis, not a settled fact.

3 articles · Updated · abcnews.com · Jul 2

$184,500 is the income ceiling Warren and Moreno want to scrap, extending Social Security's 12.4% payroll tax to all earnings as they draft bipartisan legislation.
The push follows trustees' warning that the fund could be depleted in 2032—or 2034 if old-age and disability funds are combined—bringing automatic benefit cuts of about 25% without congressional action.
Peterson Institute estimates eliminating the cap would raise about $3.4 trillion over 10 years and close more than half of Social Security's funding gap.
The proposal has already drawn Republican resistance, with Ohio Sen. Jon Husted calling it a giant tax increase, while no bill text has yet been introduced.
Social Security has paid out more than it collects since the early 2010s, with fewer births, lower immigration and retiring Baby Boomers worsening the strain.