Medicare and Social Security Fair Share Act
Sponsored By: Representative Boyle (PA)
Introduced
Summary
This bill would raise taxes on very high earners and direct that money to Social Security and Medicare. It focuses on changing payroll taxes, self-employment taxes, and the net investment income tax to pull more revenue from high wages, business earnings, and unearned income.
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- Workers and employees: It would revise the Social Security wage base so that, when the existing base is under $400,000, earnings above the base but up to $400,000 become subject to payroll tax. It would also add a 1.2 percent Further Additional Hospital Insurance tax on wages above $500,000 for joint filers, $250,000 for separate filers, and $400,000 for other filers.
- Self-employed people: It would change how net self-employment earnings are counted for Social Security and add the same 1.2 percent hospital insurance tax on high self-employment income above the same thresholds. It would bar a deduction for that additional tax.
- High-income investors, trusts, and estates: It would expand and raise the net investment income tax with a phased rate up to 13.6 percent for individuals and an increase from 3.8 percent to 17.4 percent for trusts and estates. It would also require that revenues from that tax be transferred to the Old-Age and Survivors Insurance trust fund, Disability Insurance trust fund, and the Federal Hospital Insurance trust fund in specified shares (71.3 percent to OASI, 10.3 percent to DI, and 28.7 percent to HI) for taxable years after 2025.
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Bill Overview
Analyzed Economic Effects
4 provisions identified: 1 benefits, 3 costs, 0 mixed.
Investment tax money for Social Security and Medicare
This bill would send investment‑tax revenue to Social Security and Medicare starting in 2026. About 71.3% would go to Social Security retirement, 10.3% to disability, and 28.7% to Medicare Hospital Insurance. Treasury would base the transfers on tax returns. This could strengthen funding for these programs.
Higher investment taxes on high earners
This bill would raise investment taxes for high‑income filers starting in 2026. If your modified AGI is over $500,000 (joint), $250,000 (separate), or $400,000 (others), you would owe an extra 13.6% on certain investment income, with a phase‑in on up to $100,000 of excess income ($50,000 if filing separately). It would also count more items as investment income, including some income from foreign corporations, and would not allow net operating losses to offset this tax. Income already treated as wages or self‑employment tax would not be double‑taxed. Treasury would issue rules on how to treat some foreign earnings.
Higher payroll taxes on high earners
If enacted, high earners would pay more payroll tax. In years when the Social Security wage base is under $400,000, pay above that base and up to $400,000 would be taxed for Social Security. Pay from a predecessor employer in a merger would count, and railroad pay would follow the same approach. A new 1.2% Medicare tax would apply to wages and self‑employment income over $500,000 (joint), $250,000 (separate), and $400,000 (others), with self‑employed thresholds reduced by wages already counted. Employers would only withhold on wages from that employer above $400,000 and may ignore a spouse’s pay; if they do not withhold, you still owe the tax and the employer could face penalties. These changes would start on January 1 of the first calendar year after this bill becomes law.
Much higher investment tax for trusts
If enacted, trusts and estates would face a higher investment tax starting in 2026. The Net Investment Income Tax rate would rise from 3.8% to 17.4%. The tax base would be the greater of undistributed specified net income or undistributed net investment income. This would raise taxes on many trusts and could reduce what beneficiaries receive.
Sponsors & CoSponsors
Sponsor
Boyle (PA)
PA • D
Cosponsors
There are no cosponsors for this bill.
Roll Call Votes
No roll call votes available for this bill.
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