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Bernie Moreno and Elizabeth Warren Propose Lifting Social Security Payroll Tax Cap to Protect Benefits

Republican Senator Bernie Moreno and Democratic Senator Elizabeth Warren have proposed lifting or significantly increasing the Social Security payroll tax cap. Currently, the 6.2 percent tax paid by employees and employers applies only to the first $184,500 of earned income for 2026. The joint proposal suggests that the wealthiest Americans should contribute the same percentage of their income as middle-class workers by applying the tax to all earned income. This move marks a shift for Republicans, who have traditionally opposed tax increases. Other Republican lawmakers, including Representative Tom Cole and Representative Lloyd K. Smucker, have expressed openness to raising the tax cap or the tax rate to avoid a 22 percent reduction in benefits projected for 2032. While some experts suggest raising the cap could close a significant portion of the funding gap, others argue it could reduce economic growth. Additional proposals to sustain the program include raising the retirement age, expanding means-testing, and implementing a flat-rate cost-of-living adjustment for low-income beneficiaries.

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