Here’s how it works:
First, to strengthen Social Security’s finances:
- The current cap on taxable wages would be eliminated.
- Employees would continue paying 6.25%, the same as today.
- Employers would pay:
- 5% on wages under $50,000 for eligible small businesses
- 6.25% on wages up to $250,000
- 9–10% on wages above $250,000
This means higher earners contribute more, while middle-income workers keep their current rate.
Second, to protect small businesses:
- Businesses with fewer than 50 employees would pay a reduced 5% rate on wages under $50,000.
- They would also receive a refundable payroll tax credit equal to 1% of eligible wages.
- These benefits phase out for firms where owners have high incomes, so relief goes to true small businesses.
Third, to modestly increase benefits:
- The Special Minimum Benefit would be increased for long-term low-wage workers.
- Caregivers could receive up to five years of credit for time spent out of the workforce caring for children or family members.
- The benefit formula would be adjusted slightly to increase payments for lower-income retirees.
- Earnings above the current taxable maximum would count toward benefits, but only partially, to keep the system fair and financially strong.
Overall, this plan strengthens Social Security long-term, asks more from the highest earners, protects small businesses, and modestly improves benefits for lower-income retirees — all without raising taxes on middle-class workers.