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1 Garrett Watson & Colin Miller, Analysis of Democratic Presidential Candidate Payroll Tax Proposals 1 (2020)

handle is hein.taxfoundation/aydpcn0001 and id is 1 raw text is: FISCAL FACT No. 694 Feb. 2020 Analysis of Democratic Presidential Candidate Payroll Tax Proposals Garrett Watson Colin Miller Senior Policy Analyst Programmer and Analyst Key Findings * 2020 Democratic presidential candidates have proposed various changes to federal payroll tax rates and the Social Security payroll tax wage base to raise revenue and maintain solvency for major federal entitlement programs. This includes levying Social Security payroll taxes on taxpayers with high wages, raising the Social Security payroll tax rate, and enacting new payroll taxes to fund new federal programs. * Each proposed change to payroll taxes levied on wages would make the tax code more progressive but would also reduce after-tax incomes for most wage earners. This is because employees fully bear the economic burden of payroll taxes, lowering the incentive to work and reducing economic output. Summary of Democratic Presidential Payroll Plan Details Fmr. Vice President Biden (D) 12.4% Social Security payroll tax on wages above $400,000 Fmr. Mayor Buttigieg (D) 12.4% Social Security payroll tax on wages above $250,000 Sen. Klobuchar (D-MN) 12.4% Social Security payroll tax on wages above $250,000 Tax Proposal Estimates Sen. Sen. Sanders Warren (I-VT) (D-MA) 7.5% payroll tax on employers 14.8% with a $2 million Social payroll exemption Security and 12.4% Social payroll tax Security payroll on wages tax on wages above above $250,000 $250,000 The Tax Foundation is the nation's leading independent tax policy research organization. Since 1937, our research, analysis, and experts have informed smarter tax policy at the federal, state, and global levels. We are a 501(c)(3) nonprofit organization. @2020 Tax Foundation Distributed under Creative Commons CC-BY NC 4.0 Editor, Rachel Shuster Designer, Dan Carvajal Tax Foundation 1325 G Street, NW, Suite 950 Washington, DC 20005 Conventional $808 $1,556 $1,556 Revenue, 2021- 2030 (Billions) Dynamic $657 $1,302 $1,302 Revenue, 2021- 2030 (Billions) Gross Domestic -0.28% -0.36% -0.36% Product (GDP) Capital Stock -0.33% -0.42% -0.42% Full-time -350,400 -462,500 -462,500 Equivalent Jobs Source: Tax Foundation General Equilibrium Model, November 2019. 202.464.6200 taxfoundation.org $5,505 $4,677 -1.17% -1.33% -1,570,000 $1,890 $1,573 -0.41% -0.48% -532,500

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