Medicare and Social Security Fair Share Act
Sponsored By: Senator Sheldon Whitehouse
Introduced
Summary
Raises taxes on high earners to shore up Social Security and Medicare. The bill would expand payroll, self-employment, and net investment income taxes using defined high-income thresholds and direct revenues into the Social Security and Medicare trust funds.
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- Workers and employers: The bill would make wages above the current Social Security contribution base subject to payroll tax up to a $400,000 cap and add a new 1.2 percent Medicare hospital insurance tax on wages above $400,000 for most filers and $500,000 for joint filers. It also adds rules treating predecessor wages as paid by successor employers and adjusts railroad retirement compensation rules.
- Self-employed people: Self-employment tax would mirror the new wage-base rules and face the same 1.2 percent additional Medicare tax on very high self-employment income above the same thresholds. The bill coordinates those taxes so income already hit by the wage-based Medicare tax is adjusted.
- High-income investors and the trust funds: The net investment income tax would be recalculated using a broader "specified net income" measure with a phase-in. Beginning after 2025 the bill would split net investment income tax receipts so 71.3 percent goes to the Old-Age trust fund, 10.3 percent to Disability, and 28.7 percent to Hospital Insurance.
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Bill Overview
Analyzed Economic Effects
3 provisions identified: 0 benefits, 2 costs, 1 mixed.
Higher investment tax to fund Social Security
If enacted, this would raise the net investment income tax (NIIT) for many high-income taxpayers. The bill would add an extra 13.6% NIIT-style computation on an expanded NIIT base when your modified adjusted gross income is above $400,000 for singles, $500,000 for joint filers, and $250,000 for married filing separately. The increase is phased in based on how far you are over the threshold. For trusts and estates, the NIIT rate would be 17.4% on a larger trust income measure. These changes would apply for tax years beginning after December 31, 2025. The bill would also direct most NIIT receipts to federal trust funds, sending about 71.3% to Old-Age and Survivors Insurance, 10.3% to Disability Insurance, and 28.7% to Hospital Insurance for those years.
New Medicare payroll tax for high earners
If enacted, this would add a 1.2% Hospital Insurance (Medicare) payroll tax on wages and net self-employment income above set thresholds. The thresholds would be $500,000 for joint filers, $250,000 for married filing separately, and $400,000 in other cases. Employers would only be required to withhold the tax on wages they pay above $400,000 and may ignore a spouse's wages for that withholding test. Any portion not withheld by an employer would still be owed by the employee. These rules would apply to pay and tax years on or after January 1 of the first calendar year after enactment.
More Social Security tax on high earners
If enacted, this would change how wages and self-employment income count for Social Security taxes in years when the yearly Social Security wage base is under $400,000. Wages above the statutory base but at or below $400,000 could be treated as covered pay for Social Security. The bill would also change the self-employment tax formula in those years and add rules that treat some predecessor wages as paid by a successor employer for tax purposes. Railroad compensation rules would be adjusted differently in those same years. These rules would start for pay and tax years on or after January 1 of the first calendar year after enactment.
Sponsors & CoSponsors
Sponsor
Sheldon Whitehouse
RI • D
Cosponsors
Amy Klobuchar
MN • D
Sponsored 5/8/2025
Chris Van Hollen
MD • D
Sponsored 5/8/2025
Cory Booker
NJ • D
Sponsored 5/12/2025
Ruben Gallego
AZ • D
Sponsored 5/12/2025
Roll Call Votes
No roll call votes available for this bill.
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