Medicare and Social Security Fair Share Act

Medicare and Social Security Fair Share Act

This bill increases funding for the Social Security and Medicare trust funds by extending the payroll tax on wages, self-employment income, and investment income to taxpayers with earnings exceeding $400,000.

The bill also applies a payroll tax on the pass-through business income of taxpayers earning more than $400,000 (thus eliminating the classification of earned income as distributed business profits).

Bill 118 s 1174, also known as the Medicare and Social Security Fair Share Act, is a piece of legislation currently being considered by the US Congress. The main goal of this bill is to address the financial challenges facing the Medicare and Social Security programs by increasing the amount of income subject to payroll taxes.

Specifically, the bill proposes to raise the current cap on income subject to the Social Security payroll tax. Currently, individuals only pay Social Security taxes on the first $142,800 of their income. This bill would increase that cap to $400,000, meaning that individuals earning more than $400,000 would pay Social Security taxes on their full income.

In addition to increasing the cap on Social Security taxes, the bill also proposes to apply the Medicare payroll tax to investment income for high-income individuals. Currently, individuals only pay Medicare taxes on their wages, but this bill would extend the tax to include investment income for individuals earning over $250,000. Overall, the Medicare and Social Security Fair Share Act aims to ensure the long-term financial stability of these important programs by requiring high-income individuals to contribute a larger share of their income. Proponents of the bill argue that this is necessary to prevent the programs from running out of funds in the future, while opponents may argue that it unfairly targets high-income individuals.