US lawmakers weigh payroll tax hikes as Social Security insolvency nears

September 14, 2026 at 12:12 AM2 min

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A growing group of US lawmakers, including some Republicans, has signaled openness to raising payroll taxes to shore up Social Security's finances. The shift comes as projections show the trust fund will run out of money by 2032, triggering a 22% benefit cut unless Congress acts. The debate marks a departure from decades of political resistance to touching the program's tax structure.

Key Facts

The Social Security trust fund is projected to run out of money by 2032, triggering a 22% benefit cut unless Congress acts.
Workers and employers each pay a 6.2% payroll tax on wages up to $184,500 a year, with income above that cap exempt.
Rep. Tom Cole, R-Okla., chairman of the House Appropriations Committee, said he is willing to raise the tax rate or the income cap.
Rep. Lloyd K. Smucker, R-Penn., a top candidate for House Budget Committee leadership, said lawmakers will probably have to adjust the payroll tax.
Sen. Bernie Moreno, R-Ohio, and Sen. Elizabeth Warren, D-Mass., proposed raising payroll tax revenue in a joint New York Times op-ed.

Political Shift on Tax Hikes

For decades, Social Security was considered the 'third rail' of American politics, with any suggestion of tax hikes or benefit cuts producing swift blowback. But as retirees face the prospect of much smaller checks, the political calculation may be changing. A small but growing group of lawmakers has signaled openness to shoring up Social Security's finances by raising more revenue via taxes, including some Republicans who have traditionally viewed tax hikes as anathema. Rep. Tom Cole, R-Okla., told the Washington Post he is willing to look at the tax rate and raise the amount of income subject to tax. Cole, chairman of the House Appropriations Committee, said the mathematics of Social Security are overshadowing the politics, warning that bankruptcy would be a bigger problem than keeping the program whole.

Proposed Revenue Options

Currently, workers and employers each pay a 6.2% tax on wages up to $184,500 a year, with additional wages exempt from the tax. This means the wealthy pay a relatively small share of their income to support Social Security compared to lower-income workers. Rep. Lloyd K. Smucker, R-Penn., indicated this month that raising the income cap could be part of the solution to the trust fund's insolvency. Smucker, a top candidate to be the leading Republican on the House Budget Committee, said lawmakers can't allow benefit cuts to happen in six years and must address the math problem and demographics. Sen. Bernie Moreno, R-Ohio, and Sen. Elizabeth Warren, D-Mass., wrote in a New York Times op-ed that the vast majority of Americans make less than the cap, meaning Social Security taxes apply to 100% of their income while top earners only pay on a fraction of theirs.