A new bipartisan push to fix Social Security is drawing fresh attention to who pays into the system and how much.
Elizabeth Warren and Bernie Moreno have outlined a plan to lift the cap on Social Security payroll taxes, a move that could strengthen the program’s finances while affecting higher earners who are planning around Social Security benefits.
How the Social Security payroll tax cap works
The plan “to save Social Security” centers on one key feature of the current system: the payroll tax cap.
Workers currently pay Social Security payroll taxes on wages and self-employment earnings only up to an annual taxable maximum. Earnings above that threshold are not subject to the payroll tax, meaning workers earning above the cap pay Social Security tax on a smaller share of their wages.
In 2026, the taxable maximum is $184,500. Employees and employers each pay 6.2%, while self-employed workers pay the combined 12.4%.
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The senators’ plan to remove the cap on Social Security taxes
Warren and Moreno want to remove the taxable maximum so that Social Security payroll taxes apply to earnings above $184,500 as well. Their argument is that doing so would extend Social Security’s solvency and reduce the risk of future benefit cuts.
“[T]he two of us are working together on legislation to remove the cap on Social Security taxes and extend the solvency of our retirement system,” Warren and Moreno wrote in a joint op-ed.
Why the Social Security tax cap is controversial
The payroll tax cap has long been one of the most debated aspects of Social Security. Supporters argue that the current structure is unfair because most workers pay Social Security taxes on all their earnings, while those earning above the cap pay the tax on only part of theirs.
“Why should a middle-class nurse pay a larger share of her paycheck than a wealthy corporate lawyer?” they wrote.
They point out that as wages for top earners have grown faster than those of average workers, a growing share of high earners’ wages has fallen above the taxable maximum and therefore has not been subject to Social Security payroll taxes.
Who would pay more under the plan?
Removing the cap would primarily affect workers and self-employed individuals earning more than $184,500 a year.
Workers earning below the current limit would see no direct change in their Social Security payroll taxes from removing the cap. Those earning above it, however, would pay more as additional earnings become subject to the tax.
That could include some working retirees with high wages or self-employment income. Retirees living solely on Social Security, pensions, investments, or retirement-account withdrawals would not pay additional Social Security payroll tax under the proposal.
How this plan could fix Social Security’s funding problem
The proposal comes as Social Security faces a well-documented funding challenge. The program’s trust fund is projected to run short in the early 2030s, at which point it would only be able to pay about 78% of scheduled benefits without changes.
That scenario would result in automatic reductions for retirees, something lawmakers from both parties say they want to avoid. Warren and Moreno argue that increasing contributions from higher earners is one of the most straightforward ways to close that gap.
“This is a no-brainer,” they wrote. “The wealthiest Americans… should contribute the same percentage of their income as a factory worker… or a teacher.”
According to an estimate cited by Warren and Moreno, eliminating the taxable maximum could direct about $3 trillion into Social Security over 10 years.
Why this bipartisan partnership stands out
The partnership between Warren, a Democrat, and Moreno, a Republican, stands out in a debate that is often sharply divided along party lines.
“One of us is a Republican… the other is a Democrat… We don’t agree on everything,” they wrote. “But here’s one thing we do agree on: Congress must act now to save Social Security.”
That kind of agreement is notable because Social Security reform has historically stalled due to disagreements over whether to raise taxes or reduce benefits.
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What critics say about raising Social Security taxes
Not everyone supports lifting the payroll tax cap. Opponents argue that higher payroll taxes could increase labor costs, reduce take-home pay, or affect compensation and hiring decisions.
Others raise concerns about whether increasing taxes alone is enough to solve the problem, noting that long-term sustainability may also require changes to benefits or eligibility rules. Those competing views are likely to shape the debate if the proposal moves forward.
“Social Security must remain a stable foundation to help retirees afford life’s basic necessities,” Warren and Moreno wrote, pointing to inflation and economic shifts as reasons to act sooner rather than later.
Bottom line
Under the approach Warren and Moreno described, workers earning below the taxable maximum would see no direct payroll-tax increase, while those earning above it could pay substantially more.
The debate matters for anyone wondering whether they are on track for retirement, since future rules could affect both taxes and benefits.
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Author Details
Jordan Major
Jordan Major is a writer for FinanceBuzz specializing in taxes. With over six years of experience covering financial topics, he helps readers navigate tax decisions that can impact their finances, from steering clear of common filing mistakes to spotting tax breaks that might come with risks.
