Jun 29, 2026
There’s a new unlikely bipartisan duo in Congress teaming up to fix one of Social Security’s most vexing and basic problems: How to keep the popular social safety net program issuing full monthly benefits once its trust funds run dry.
Sens. Bernie Moreno of Ohio and Elizabeth Warren of Massachusetts said on June 23 that they will soon introduce legislation to lift the cap on taxable income for Social Security, currently set at $184,500. The pair presented their idea as a “common-sense solution” that would be effective in extending Social Security’s lifespan for decades to come.
Advertisement
“This is a no-brainer: The wealthiest Americans, who have benefited the most from America’s opportunities, should contribute the same percentage of their income as a factory worker in Chillicothe, Ohio, or a teacher in Worcester, Mass.,” they said in a New York Times op-ed.
Thanks for subscribing!
Read the best of Moneywise in 5 minutes or less.
By signing up, you accept Moneywise Terms of Use, Subscription Agreement, and Privacy Policy.
It was a remarkable announcement given longstanding Republican opposition to pursuing tax hikes on most economic and fiscal issues, including Social Security solvency.
In this case, Moreno is breaking from his party in endorsing a solution that’s long enjoyed support from progressives like Warren and Sen. Bernie Sanders of Vermont. An ex-car salesman, Moreno is a first-term senator who has leapt into difficult bipartisan negotiations with Democrats to mixed success. He’s also a close ally of President Donald Trump with a populist streak.
Why policymakers want to overhaul the payroll tax cap
Depending on how it’s structured, lifting the payroll tax cap could extend the Social Security program for several decades. Earlier this month, the Social Security trustees released an annual report detailing the financial state of the program, which is financed with a blend of payroll taxes, interest from the trust fund and taxes on benefits.
Unless Congress steps in with a fix by 2032, the Social Security program must slash 22% of monthly benefits to retirees to accommodate the drop in incoming revenue. Essentially, it also means that the next president will be tasked with shoring up a social program that issues monthly benefits to 68 million retired and disabled workers.
Warren and Moreno say they want to preserve a program that fulfills a desire among Americans to retire with dignity after laboring in the workforce.
“Social Security is a core component of our nation’s promise,” the pair wrote. “That promise is at risk of unraveling.”
The payroll tax cap is indexed annually for inflation. Last year, it stood at $176,100. For 2026, the first $184,500 of a worker’s wages are subject to Social Security taxes. For high-earners pulling in more than that, their wage income isn’t subject to Social Security’s payroll taxes. Income from dividends or capital gains aren’t taxed either.
Advertisement
Critics argue the payroll tax cap is ripe for reform given worsening income inequality. The left-leaning Center for Economic and Policy Research think tank said in a blog post that Americans earning at least $1 million in wages hit the Social Security tax limit on March 9. So high-earners don’t pay Social Security taxes on the rest of their income for the rest of the year, while the vast majority of Americans do.
For the richest individuals, they can hit the limit in less time than it takes to heat up frozen dinner in the microwave. Democratic lawmaker John Larson of Connecticut presented calculations late last year that Tesla CEO Elon Musk reached the taxable maximum by 12:01AM on New Year’s Day.
Must Read
- The ultra-rich use these 5 real estate strategies to build wealth while they sleep — you can start with just $100
- Here’s the average income of Americans by age in 2026. Are you keeping up or falling behind?
- Insurance companies profit most from drivers who auto-renew without shopping around. Comparing 100+ quotes takes 2 minutes and costs nothing
Join 250,000+ readers and get Moneywise’s best stories and exclusive interviews first — clear insights curated and delivered weekly. Subscribe now.
Where does Trump stand on Social Security
In both presidential runs, Trump campaigned on shielding Social Security and Medicare — another popular health insurance program for mostly elderly Americans — from any cuts. That was also a major rupture in how Republicans dealt with the issue since most policymakers on the right believed raising the retirement age for younger Americans or some benefit reductions were necessary.
Republicans passed a temporary larger standard deduction for seniors totaling $6,000 in their megabill last year. Congress isn’t likely to deal with Social Security anytime soon. A short-lived bipartisan Senate group fizzled out in early 2023 after their ideas failed to gain traction among lawmakers and then-President Joe Biden.
You May Also Like
- JP Morgan sees gold hitting $6,000/oz before 2027 — and a Gold IRA lets you hold the physical metal while deferring the tax bill. Get your free guide from Priority Gold
- Dave Ramsey warns nearly 50% of Americans are making 1 big Social Security mistake — here’s what it is and the simple steps to fix it ASAP
- Thanks to Jeff Bezos, you can now become a landlord for as little as $100 — and no, you don't have to deal with tenants or fix freezers. Here's how
- Millionaires under 43 are reshaping investing — just 25% of their portfolios are in stocks. Here’s where their money is going
Joseph Zeballos-Roig is a policy and politics journalist based in Washington D.C with a focus on economics. He is experienced in connecting the significance of events in the capital to the lives of everyday Americans whether its taxes, tariffs, interest rates or federal programs.
