An Employer Compensation Tax for Social Security and Medicare | Committee for a Responsible Federal Budget

Employer Compensation Tax for Social Security and Medicare

The Social Security retirement and Medicare Hospital Insurance trust funds are approaching insolvency, with depletion expected in seven years.

Without action, retirees face a 24 percent benefit cut in 2032, and Medicare hospital payments would be cut by 12 percent.

Replacing the employer side of the payroll tax with a flat Employer Compensation Tax on all employer compensation costs is a new alternative.

This approach is suggested in the Trust Fund Solutions Initiative white paper as a way to boost revenue.

Autor's resume: New tax to save funds.

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Committee for a Responsible Federal Budget Committee for a Responsible Federal Budget — 2025-10-17

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