A small but potentially important shift is happening inside the Republican Party. Some lawmakers may be open to raising Social Security payroll taxes on high earners to help prevent looming benefit cuts.
Rep. Lloyd Smucker of Pennsylvania, a leading contender to chair the House Budget Committee for Republicans in the next Congress, recently said lifting the cap on earnings subject to Social Security taxes could form part of a deal to stabilize the program.
Under the Social Security trustees’ 2026 projections, the Old-Age and Survivors Insurance trust fund is expected to run out of reserves in the fourth quarter of 2032. If Congress does nothing, incoming revenue would cover only about 78% of scheduled retirement and survivor benefits — effectively forcing a 22% reduction. The combined Social Security trust funds are projected to last until 2034, when about 83% of scheduled benefits could be paid.
“We can’t allow that to happen,” Smucker said, arguing lawmakers need to confront the program’s demographic and financial pressures.
Republicans Consider Taxing More High-Income Earnings
Social Security is funded largely through a 12.4% payroll tax, split evenly between workers and employers. In 2026, the tax applies only to the first $184,500 of earnings. Income above that amount is not subject to the Social Security portion of the payroll tax.
Smucker is not alone in questioning that structure. Republican Sen. Bernie Moreno of Ohio joined Democratic Sen. Elizabeth Warren of Massachusetts this summer called for the cap to be lifted. They argue that high earners should pay Social Security tax on the same share of their wages as most workers.
Proposals differ considerably. Some would restart the payroll tax above $250,000 or $400,000, which creates a “donut hole” of untaxed income, while others would eliminate the cap entirely.
The idea is still very controversial. The Tax Foundation estimates that applying Social Security payroll taxes again to earnings above $400,000 could raise roughly $820 billion over a decade on a dynamic basis, but says the higher marginal tax burden could reduce long-run economic output.
Smucker also floated raising the retirement age and expanding means-testing so wealthier retirees receive less. Democrats have generally favored raising revenue rather than reducing benefits.
With the 2032 deadline moving closer, however, the willingness among some Republicans to discuss higher taxes suggests the eventual Social Security rescue package may require a difficult mix of both tax increases and benefit changes.